State Consumer Disputes Redressal Commission
Anjpar Export (Pvt. ) Ltd. vs Oriental Insu. Co. Ltd. on 28 April, 2015
Daily Order IN THE STATE COMMISSION: DELHI (Constituted under Section 9 of the Consumer Protection Act, 1986) Date of Decision: 28.04.2015 First Appeal No. 53/2011 (Arising out of the order dated 27.12.2010 passed in complaint case No. 774/2007 passed by the District Consumer Disputes Redressal Forum (North), Room No. 2, Old Civil Supply Bld., Tis Hazari, Delhi. In the matter of: M/S ANJPAR EXPORT (PVT)LTD, Through its Director Sh. Jeet Singh Sandhu, R/o C-55, Durga Puri, Delhi-1100 Appellant Versus THE ORIENTAL INSURANCE CO.LTD., Through its Principal Officer/Branch Manager, Branch Office: 1576, Church Road, Kashmere Gate, Delhi-110092. Respondent CORAM SH N P KAUSHIK - Member (Judicial) SH. S.C. JAIN - Member 1. Whether reporters of local newspaper be allowed to see the judgment? 2. To be referred to the reporter or not? N P KAUSHIK - MEMBER (JUDICIAL) JUDGEMENT
Appellant has impugned the orders dated 27/12/2010 passed by the Ld. District Forum (North), Tis Hazari, Delhi. Vide impugned orders Ld. District Form dismissed the complaint observing as under:
"In view of the authority mentioned above, we are of the view that since the vehicle in question was a commercial vehicle used by the complainant company for business purpose and insurance service was availed for business/commercial purpose, the complainant does not come within the definition of 'consumer' after the amendment of Section 2(d) of the Act in 2002. We, therefore, hold that the complaint is not maintainable and the same is dismissed accordingly. There is no order as to cost."
Facts of the complaint in brief are that the Complainant M/s Anjpar Exports Pvt. Ltd. got the vehicle known as 'Prime Mover/Horse' bearing No. HR-38M-0554 insured with Oriental Insurance Company Ltd. (hereinafter referred to as OP) for an amount of Rs. 8 lakh. The vehicle met with an accident on 12/2/2006. OP closed the claim of the complainant as 'No Claim'. Intimation in this behalf was given by the OP to the Complainant vide letter dated 13/6/2007. Contention of the OP was that the Complainant after receiving the letter dated 5/6/2006 gave its consent agreeing to take the claim on the basis of net of salvage for Rs. 3 lakhs towards full and final settlement of the claim. After deducting the excess loss of the net amount, the settled loss was calculated at Rs. 2,23,875/-. The OP vide its letter dated 24/5/2007 had informed the complainant about settlement of their claim for Rs. 2,23,500/- against discharge voucher duly signed by the Complainant within 7 days. Complainant failed to sign the discharge voucher. Even the reminder dated 1/6/2007 remained un-replied. It was for this reason that the OP closed the claim as 'No Claim'.
Ld. District Forum heard the parties on the maintainability of the complaint relying upon Section 2(d) of Consumer Protection Act, 1986. Para 5 of the impugned orders is relevant in the present context and the same is reproduced below:
"It may be mentioned that prior to 2002 all the goods purchased and service hired against payment were subject matter of Consumer Protection Act and the person who availed such services against consideration was designated as 'consumer'. After amendment of Consumer Protection Act in 2002, an explanation has been added to Section 2(d) of the Act which qualifies the word 'consumer'. As per Section 2(d) any person who purchases goods/hire service against consideration/payment is a 'consumer'. But if the services were hired or goods were purchased for any commercial purpose, such person would not come within the definition of word 'consumer'. However, an explanation was added to section 2(d) which provides that "commercial" purpose does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood i.e. by way of self-employment". In the present case the complainant is a company registered under the Companies Act. When it is a company, certainly it is a commercial entity engaged in commercial activities. Ld. Counsel for the Complainant was asked as to what was the purpose for which the vehicle was being used by the complainant. He replied that the vehicle was being used for transporting goods of the complainant company. If it is so, then certainly the vehicle was being used for business purpose of the complainant company. A company therefore cannot be said to be a person availing services for 'self-employment'. It is running a commercial activity and the vehicle was used in connection with the business of the complainant company. Therefore the services of the Insurance were availed for business/commercial purpose by the complainant. In our opinion, the complainant does not fall within the definition of 'consumer' as given in Section 2(d) of the Act."
We have heard the Counsel for the Appellant/Complainant Sh. Sukhbeer Singh and Counsel for the OP/Respondent Sh. Ravi Sabarwal at length. Complainant has relied upon the case for M/s Hasorja Motors Ltd. Vs. Oriental Insurance Company Ltd. decided by the Hon'ble National Commission on 3/12/2004.
Hon'ble Apex Court has heard that there is no question of commerce in obtaining insurance coverage. Hon'ble Court has noticed the discussion on Contract of Indemnity in New Insurance Law by Brijnandan Singh. The same is reproduced below:
"Para 19:
Contract of indemnity: The very foundation in my opinion of every rule which has been applied to the insurance law is that the contract of insurance contained in a fire or marine policy is a contract of indemnity and of indemnity only and that this means that the assured in the case of loss against which the policy has been made, shall be fully indemnified but never more than fully indemnified. That is the fundamental principle of insurance, and if ever a proposition is brought forward which is at variance with it, tht is to say which either will prevent the assured from obtaining a full indemnity, that proposition must certainly be wrong. (Castellain Vs. Preston (1883) 11 QBD 380).
Under such contracts the insurers undertake to indemnify the insured for the actual loss suffered by him as a result o the even insured against. The principle that a contract of assurance (except life assurance and insurance against accident) is a contract of indemnity, leads the insured to be interested in the preservation of the thing insured and the desired for the happening of the event insured against becomes remote. (Mathey Vs. Curling (1922) A AC 180).
ON the basis of the aforesaid purpose of the insurance policy, he contends that availing of the insurance policy is for indemnifying the loss which may be suffered by the assured; it is for protection and not for making any profit. Therefore, it would be totally unjustified to arrive at a conclusion that as the Complainants are carrying on business/trading activity and as they have taken the insurance policy, they are not entitled to approach the consumer for a or that they are excluded as per Section 2(1)(d) of the Act.
Findings:
At the outset, it is o be stated that an insured who takes the insurance policy cannot trade or carry on any commercial activity with regard to the insurance policy taken by him. Under Sec.3 of the Insurance Act, 1938, no person is permitted to carry on business of insurance unless he obtains a certificate or registration from the Insurance Recovery and Development Authority.
Further, hiring of services of the Insurance Company by taking insurance policy by Complainants who are carrying on commercial activities cannot be held to be a commercial purpose. The policy is taken for reimbursement or for indemnity for the loss which may be suffered due to various perils. There is no question of trading or carrying on commerce in insurance policies by the insured. May be that insurance coverage is taken for commercial activity carried out by the insured.
In Halaburys Laws of England, vol. 25, 4th Edition, the origin and common principles of insurance is discussed and in paragraph 3 it has been mentioned that it is based on principle of indemnity. Thereafter, relevant discussion is to the effect that most of contract of insurance belong to general category of contracts of indemnity. In the sense that insurers liability is limited to the actual loss which is, in fact, proved. The contract is one of indemnity and, therefore, insured can recover the actual amount of loss and no more.
In this view of the matter, taking of the insurance policy is for protection of the interest of the assured in the articles or goods and not for making any profit or trading for carrying on commercial purpose."
In view of the ratio laid down by the Hon'ble National Commission, the Complainant in the present case had obtained the insurance policy only to cover the losses. It was never meant for a commercial purpose. We, therefore, allow the appeal and set aside the orders dated 27th December, 2010 passed by the Ld. District Forum (North), Tis Hazari, Delhi. Parties to appear before the Ld. District Forum on 15th May, 2015 who shall decide the complaint on merits. Appeal is accordingly disposed of.
(N P KAUSHIK) MEMBER (JUDICIAL) (S.C. JAIN) MEMBER
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