State Consumer Disputes Redressal Commission
Jagdish Chand Gupta vs The Oriental Insurance Company Ltd on 19 March, 2013
BEFORE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM SOLAN, H
H.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
SHIMLA.
Consumer Complaint No: 22/2001
Date
of Decision: 19.03.2013.
M/s JCG,
Through its Sole
Proprietor Shri Jagdish Chand Gupta,
H.No.163, Sector
38-A, Chandigarh-160038.
Complainant.
Versus
1. M/s The
Oriental Insurance Company Ltd.
Through
its Managing Director,
Regd.
& Head Office: Oriental House,
P.B.
No.7037, A-25/27, Asaf Ali Road, New Delhi.
2. M/s The
Oriental Insurance Company Ltd.
Through
its Regional Manager,
Regional
Office, Surindra Bulding,
S.C.O.
109-111, Sector 17-D, Chandigarh.
3. M/s The
Oriental Insurance Company Ltd.
Through
its Sr. Divisional Manager,
Divisional
Office No.2, SCO 48-49,
Sector
17-A, Chandigarh.
4. M/s The Oriental
Insurance Company Ltd.
Through
its Branch Manager,
S.C.O.
40, Sector-7, Panchkula.
5. M/s The
Oriental Insurance Company Ltd.
Through
its Divisional Manager,
Upper
Kaithu, Kali Bari Temple Road, Shimla.
Opposite Parties.
For the
Complainant: Mr. Ratish
Sharma, Advocate.
For the
Opposite Parties: Mr.
Lalit Kumar Sharma, Advocate.
Consumer
Complaint No: 09/2010.
Date
of Decision: 19.03.2013.
Jagdish Chand Gupta,
Proprietor,
Jagdish Chand Gupta
Engineers & Contractors,
163, Sector 38-A,
Chandigarh-160014.
Complainant.
Versus
The Oriental Insurance Company Ltd.
S.C.O. 40, Sector-7, Panchkula-134109.
Opposite Party.
Coram
Honble
Mr. Justice (Retd.) Surjit Singh, President
Honble
Mr. Chander Shekhar Sharma, Member
Honble
Mrs. Prem Chauhan, Member.
Whether
approved for reporting?[1]
For the
Complainant: Mr. Ratish
Sharma, Advocate.
For the
Opposite Party: Mr. Lalit Kumar
Sharma, Advocate.
O R D E R:
Justice (Retd.) Surjit Singh, President (Oral) By this common order, we proceed to dispose of two complaints filed by complainant, Jagdish Chand Gupta, one in his own name, i.e. complaint No.9 of 2010, and the other in the name of his sole proprietorship concern, M/s. JCG, i.e. Original Complaint No.22 of 2001.
2. In the year 2000, complainant, Jagdish Chand Gupta was engaged in the occupation of civil construction. He was registered as a contractor inter alia for construction of bridges. He was awarded a contract for construction of a bailey bridge in the area of Rampur Bushehar, District Shimla. He started the work in May, 2000. On 2nd June, 2000, he got his construction equipment insured in the sum of `42.00 lacs, with the opposite party, i.e. Oriental Insurance Company Ltd., which is engaged in the business of insurance. The equipment insured consisted of five specific items, which are as under:
i) Grills for shuttering 20 tonnes @ `6.00 lacs `30,000/-:
ii) Gurders 40 tonnes @ `25,000/-
`10.00 lacs per tonne:
iii) Steel plates 50 tonnes @ `30,000/- `15.00 lacs Per tone:
iv) Strands (HT Wire) 23 tonnes @ `40,000/-
`9.20 lacs
v) Stressing material: `1.80 lacs Insurance cover note was issued on 2nd June, 2000, in which the aforesaid details were mentioned. It was also mentioned that the material was lying stacked in the open on National Highway No.22. Later on, a policy based on the aforesaid cover note was issued. On 8th June, 2000, due to heavy rain and cloud-burst in the area, the rivulet (khad), on which the bailey bridge was being laid, was flooded, as a result of which, the entire insured equipment had been washed away.
Report was lodged with the police on the very day of the occurrence of the incident. Opposite party was also apprised of the loss and a claim for `39,53,737/- was lodged with it.
3. On 8th June, 2000, after the occurrence of the aforesaid incident, complainant approached the opposite party to insure the construction material stored at the site and some other machinery not covered under the earlier cover note and the policy, by including the said material and machinery in the initial policy itself. The value of such material and machinery was stated to be `28.00 lacs. That request was acceded to by the opposite party. According to the complainant, on 10th June, 2000, after the additional insurance coverage, a landslide took place, in which the entire subsequently insured construction material and some of the insured machinery, were washed away resulting in loss to the tune of `9,32,254/-. This loss was also reported to the opposite party. The date of report of loss to the opposite party is alleged to be 13.06.2000.
4. Opposite party did not allow either of the two claims, despite its surveyor having assessed the loss caused in the incident of 8th June, 2000 at `29,23,492/-, and the loss resulting from the incident of 10th June, 2000 at `7,47,225/-. Complainant, therefore, filed two separate complaints, one in respect of the equipment covered under the initial insurance, and the other in respect of the construction material and machinery covered under the second agreement of insurance. Complaint with respect to loss of initially insured equipment was filed in the year 2003 before the Honble National Consumer Disputes Redressal Commission, because at that time the upper limit of the original jurisdiction of the State Commission was `20.00 lacs. Complaint with respect to the loss of the material and machinery insured subsequently was filed before this Commission in the year 2001.
5. Both the complaints were contested by the opposite party by filing replies. In the reply filed before the Honble National commission, opposite party took the plea that the equipment, which was initially insured, was lying by the side of the National Highway No.22, and the insurance cover extended only if the said equipment was lost while stacked at the site, where it lay at the time of the insurance proposal and the issuance of cover note. It was stated that since the material had been shifted from that site to the site of the bridge and put to use in the process of construction of the bailey bridge, the site of which was away from the National Highway, it was not liable to indemnify the complainant.
6. As regards the complaint filed before this Commission, opposite party took the plea that no incident had taken place on 10th June, 2000 and that, as a matter of fact, the proposal for covering the risk of construction material and other machinery was made on 8th June, 2000, only after the said material and machinery had been lost in the flood.
Also, it was pleaded that the Commission did not have the jurisdiction as the agreement of insurance had been made at Ambala in Haryana State. Further, the complainant was alleged to be guilty of suppressing true facts and making false claim. In both the cases, it was alleged by the opposite party that the complainant was not a consumer as he was engaged in commercial activity and the service of insurance was hired by him in connection with his work as a civil construction contractor.
7. Despite directions by this Commission, opposite party was reluctant to produce the report of the surveyor before this Commission.
An application was moved by the complainant seeking a direction to the opposite party to produce the report of its surveyor. That application was contested by the opposite party and plea was taken that the surveyors report was a privileged document and it was an internal matter of the opposite party and so it was under no obligation to produce the report or even to disclose its contents. This Commission, vide order dated 16.10.2003, directed the opposite party to produce the report. That report was produced in November, 2003. This Commission disposed of the complaint, i.e. Original Complaint No.22 of 2001, vide order dated 4th April, 2005. It was observed that the conduct of the opposite party in not producing the report on its own, amounted to withholding of material evidence. The report, despite its having been produced by the opposite party, in compliance with the order dated 23.10.2003, was not taken into consideration by the Commission. Complaint was allowed and the opposite party directed to pay an amount of `7,47,225/- as assessed by the surveyor of the opposite party.
8. Appeal was filed against the aforesaid order of this Commission before the Honble National Commission. That appeal has been accepted, vide order dated 25th November, 2009, and the case remanded to this Commission with the direction that the same be decided afresh, after taking on record the surveyors report and permitting the parties to adduce evidence. While passing this order, the Honble National Commission has also transferred the complaint filed before it, in the year 2003, to this Commission with the direction to dispose of the same alongwith the remanded complaint, which was filed before this Commission. Reason for transfer of the complaint from the record of the Honble National Commission to this Commission is that the upper limit of original jurisdiction of this Commission has been raised to `1.00 Crore. That is how the two complaints are now before us and are being disposed of by a common order.
9. We will first deal with the complaint that was filed before us, i.e. Original Complaint No.22 of 2001.
10. Objection has been raised with regard to the territorial jurisdiction of this Commission. It is alleged that insurance agreement was executed at Ambala, in the State of Haryana and, therefore, the Haryana Consumer Commission has the jurisdiction. It may be true that agreement was entered into at Ambala, as alleged, but the alleged loss of insured material took place, within the jurisdiction of this Commission and, therefore, it can be said that part of cause of action took place within the territorial jurisdiction of this Commission and, hence, this Commission has the jurisdiction.
11. As regards merits of the case, surveyor has, no doubt, in his report, which is available on the record, given the impression that the material and machinery, which was got insured subsequently on 08.06.2000, was lost due to a landslide that occurred on the night of 9th/10th June, 2000, yet we are unable to persuade ourselves to agree with this implied observation of the surveyor. Reason is that the documents, on which the surveyor has placed reliance in support of this observation, do not say that another landslide had taken place on 10th June, 2000, except one self-serving statement of two employees of the complainant, i.e. Vikas Gupta and Jitender Jamwal, and this joint statement of Vikas Gupta and Jitender Jamwal is contrary to what Vikas Gupta had reported to the police on 12.06.2000, vide DD report No.7 of 12.6.2000.
12. As per DD report dated 12.06.2000 which is a part of the report of the surveyor, damage had been caused to the insured material, including some of the machinery insured, on 08.06.2000 at 2.30 p.m., when the rivulet was flooded, and the slab of the bridge, which had recently been laid, was washed away. Report further says that the quantum of the total loss sustained by the complainant was to the tune of `65.00 lacs. There is no reference to the incident of 10th June, 2000 in this report, though Vikas Gupta in his joint statement with Jitender Jamwal, made to the surveyor stated that on 10th June, 2000, he had been informed by some labourers that on the previous night there had been noise of rolling boulders and that in the morning, they saw that the construction material, some machinery had been swept away by the landslide. Other documents relied upon by the surveyor to support his observation of incident of 10th June, 2000, do not say that any incident on 10th had taken place.
These other documents, include the statement of one B.R. Sharma, a Junior Engineer of Public Works Department, posted for the maintenance of National Highway, close to the site of the bridge.
13. Learned counsel representing complainant submits that another report was lodged with the police on 02.07.2000 by the complainant himself, in which there is a reference to the occurrence of landslide of 10th June, 2000. This being a delayed report, is of no legal value, particularly when it is contradictory to the earliest version given to the police by Vikas Gupta, vide report No.7, dated 12.06.2000, reference to which has already been made, hereinabove.
14. In view of the above stated position, original complaint filed before this Commission, i.e. Consumer Complaint No.22 of 2001 is dismissed.
15. As regards the second complaint, i.e. the one received by transfer from the Honble National Commission, the only relevant point that has been raised on behalf of the opposite party, is that the risk of construction equipment initially insured on 02.06.2000, was covered so long as the said equipment remained at the site, where it was stacked at the time of its insurance, i.e. by the side of National Highway No.22, but the said equipment at the time of its loss, was at the site of the bridge, away from the aforesaid National Highway. Objection is meritless. Location of the equipment is mentioned in the insurance cover note only for identification of the insured equipment. If the equipment, which is required for shuttering of bridges was to be kept stacked at one place, far away from the rivulets and rivers, without there being any risk of its loss by flooding, where was the need for insurance. The very fact that the equipment was required for shuttering purposes, implies that it was to be made use of at places, other than where it was stacked, at the time the proposal for insurance was made and the insurance was to cover the risk of loss when the same was put to use at such other places too. We have taken similar view in two other cases, i.e. F.A. No.105/2011, titled Chanchal Singh vs. United India Insurance Company Limited & Another, decided on 10.5.2012 and F.A. No.13/2008, titled Ajay vs. The New India Assurance Company Limited & Another, decided on 03.07.2012.
16. Opposite party has also taken the plea that the complainant is not a consumer as he is engaged in commercial activity and the insured material was being used in connection with that activity. Submission has been noticed only to be rejected. Complainant hired the opposite partys service for insuring himself against the loss of the equipment, which was in the nature of his capital for the business of construction of bridges. He did not hire the opposite partys insurance service for making any profit out of it.
17. As regards the quantum of indemnification, surveyor, vide his report dated 16th October, 2000, assessed the loss at `29,23,492/-. While making the assessment, surveyor has reduced the cost of the insured equipment, without assigning any reason. Cost of grills for shuttering is stated to be `6.00 lacs at the rate of `30,000/- per tonne with weight of 20 tonnes in the insurance cover note. Surveyor in his report has taken the cost of this item at `20,062/- per tonne in the case of new equipment and `10,031/- in the case of old equipment. Quantity is shown to be 20.556 tonnes, say almost the same as was insured. So is the case with girders. Rate mentioned in the insurance cover note is `25,000/- per tonne, but the surveyor has taken it to be `18,491.77 per tonne. Similarly, in case of shuttering plates rate mentioned in the cover note is `30,000/- per tonne and the surveyor has taken it as `23,021.36.
With regard to strands H.T., rate shown in the cover note is `40,000/- per tonne, the surveyor has taken it at `39,009/-. Variation in the amount of loss claimed by the complainant and that assessed by the surveyor is on account of this arbitrary lower assumption of rates by the surveyor.
18. Insurance was got done on 02.06.2000 and the rates mentioned in the cover note on 02.06.2000 would not have gone down so much within 6-7 days, as assumed by the surveyor in his report. In any case, there is no material on record nor any reason indicated in the report for assuring the rates lower than those mentioned in the cover note. Admittedly, the entire insured material, which was insured for `42.00 lacs, had been washed away in the flood. Complainant assessed the loss at `39,53,737/-. There cannot be any reason to disbelieve this figure.
19. As a result of the above discussion, complaint No.9 of 2010, which was initially filed before the Honble National Commission, and was registered there as Original Complaint No.90 of 2003, is allowed and the opposite party is directed to pay `39,53,737/- to the opposite party, with interest at the rate of 9% per annum from the date of filing of the complaint, before the Honble National Consumer Disputes Redressal Commission, i.e. 10.03.2003, to the date of the payment of the aforesaid amount of money, and also to pay `50,000/- as compensation for unjustified repudiation of the claim, which can legitimately be presumed to have caused mental agony to the complainant, and further to pay `20,000/- as costs of the complaint.
20. This order be placed on the record of C.C. No.22/2001 and its authenticated copy on the record of C.C. No.09/2010.
21. One copy of this order be sent to each of the parties, free of cost, as per Rules.
(Justice Surjit Singh) President (Chander Shekhar Sharma) Member (Prem Chauhan) Member March 19, 2013.
*DC Dhiman* [1] Whether reporters of the local papers may be allowed to see the order?