State Consumer Disputes Redressal Commission
Ginni Filaments Ltd vs The New India Assurance Co. Ltd on 21 April, 2008
IN THE STATE COMMISSION : DELHI IN THE STATE COMMISSION : DELHI (Constituted under Section 9 clause (b)of the Consumer Protection Act, 1986 ) Date of Decision: 21-04-2008 Complaint Case No. C-11/2000 M/s Ginni Filaments Ltd, Complainant 8th Floor, Padma tower-II, 22, Rajendra Place, New Delhi-110008. Versus 1. The New India Assurance Co. Ltd, Opposite Parties New India Assurance Buildinhg, Through 87, Mahatma Gandhi Road-Fort, Mr. Abhinav Singhvi, Mumbai-400 001. Advocate. 2. The New India Assurance Co. Ltd, Regional Office, Jeevan Bharati Building, Tower-II, Level V, 124, Connaught Circus, New Delhi-110001. 3. the New India Assurance Co. Ltd. Divisional Office, 902-905, Hemkunt Tower, 6, Rajendra Place, New Delhi-110008. CORAM : Justice J.D. Kapoor- President Ms. Rumnita Mittal - Member
1. Whether reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
JUSTICE J.D. KAPOOR, PRESIDENT (ORAL) The building, machinery and stocks etc. of the complainant company were insured with the O.P Insurance Company. Loss occurred to these due to a fire and the Surveyors of the O.P assessed the loss at Rs. 13.74 Lacs. However, the O.P has paid only Rs. 8.21 Lacs. By way of this complaint, the complainant is seeking the following reliefs:-
i) Payment of balance amount of Rs. 5.53 lacs
ii) Interest on Rs. 8.21 Lacs @24% from 1-1-998 to 6-8-1999.
iii) Interest on balance of Rs. 5.53 Lacs @24% Per annum for the period 1-1-1998 till payment.
iv) Compensation and damages of Rs. 4.3 Lacs.
2. The fire occurred on 28-2-1997 in which the building, machinery were damaged and some stocks were destroyed. Claim was lodged with the O.P. The Surveyor vide their report dated 21-11-1997 assessed the loss as follows:-
i) Building Rs.
1.79 Lacs
ii) Machinery Rs. 3.70 Lacs
iii) Stocks Rs. 8.25 Lacs
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Total = Rs.13.74 Lacs
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3. The O.P. vide letter dated 15-12-1998 communicated the settlement of the claim at Rs.8,21,058/-. On demand by the complainant, the O.P Company provided the details of the settlement as follows:-
i) Building Rs.
1, 79,000-00
ii) Machinery Rs. 2, 59,000-00
iii) Stocks Rs.
6, 75,028-00
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Total = Rs. 11, 13,028-00
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4. O.P-Company further stated that the competent authority while sanctioning the claim as non-standard had effected 25% deduction amounting to Rs. 2,78,257/- from the above adjusted loss on account of the breach of terms and conditions of the policy. In the correspondence between the parties, complainant denied any breach of the terms and conditions of the policy but the O.P Company was not convinced and offered the same amount of Rs. 8,21,058/- in full and final settlement of the claim which the complainant accepted only as On account payment and informed the O.P accordingly vide letter dated 1-6-1999. Now the complainant is seeking the reliefs, as mentioned earlier.
5. According to the O.P, on the date of fire the Blow Room (new) contained additional machinery, i.e. one complete Blow Room line in packed condition awaiting installation. Also there was no insurance on machinery in Cotton based Godown No.4 in which the bailing press was installed at the time of fire. Accordingly there was under insurance of 30% and hence the adjusted loss was arrived at Rs. 2,59,000/- by the Surveyors in respect of the adjusted loss of Rs. 3,70,000/- with regard to the machinery.
6. In respect of the stocks, it is stated that there was under insurance of 18.20% as per the Surveyors. It is stated that the affected waste godown and the adjacent bailing press block contained only comber waste in half pressed bales. All other loose wastes were stored in the open compound at the time of fire due to lack of space in the godown. These stocks were unaffected in the fire. There was no insurance on stocks in the bailing press block and after considering the space available it was approximated that the bailing press block could hold maximum of 1500 Kgs of comber waste bales. Accordingly, this quantity was treated as uninsured and was deducted from the total quantity to arrive at the stocks in the waste godown.
7. It is further stated that due to violation of condition No.3 contained in Policy
(c) the claim was treated as non-standard and 25% deduction was effected from the adjusted loss of Rs. 11,13,028/-. Further, a sum of Rs.5,711/- was adjusted towards difference of premium as it was found that the waste godown was communicating with the blow room.
8. According to the O.P Company there has been no deficiency in service on the part of the Insurance Company. OP has also raised the plea of pecuniary jurisdiction.
9. Complainant has filed a rejoinder reiterating the averments made in the complaint. Parties have filed their evidence by way of affidavits.
10. In rejoinder complainant has not controverted the plea of the OP for having not adequately insured the Blow Room contained additional machinery and subsequently shifted it to Cotton Based Godown. Similarly it has not shown as to why there was under insurance of 18-20% inspite of the fact that the affected waste godown and the adjacent bailing press block contained only comber waste in half pressed bales. All other loose waste were stored in the open compound at the time of fire due to lack of space in the godown.
11. In our view, the claim was rightly treated as non-standard in terms of condition No.3 of the policy and accordingly 25% deduction was affected from the loss of Rs. 11,13,028/- and further sum of Rs. 5,711/- was adjusted towards difference of premium.
12. So far as claim of Rs. 8.21 lacs was calculated after adjustment loss in terms of the policy there is no deficiency but the inordinate delay taken by the OP in settling the claim entitles the complainant adequate compensation for mental agony, harassment even if the complainant had declined to accept the amount offered by the OP.
13. We have taken a view and impressed upon the Insurance Companies that claim of every insured or consumer should be decided one way or the other positively within six months or one year and any further amount of time taken by the Insurance Companies itself amounts to deficiency in service as no consumer or insured can be kept in suspended animation for years together and for such a delay the consumer always suffers not only financial loss but also harassment and mental agony.
14. In the given facts and circumstances of the case, we only award compensation of Rs. 50,000/- which shall include the cost of litigation for the mental agony, harassment, physical discomfort and other sufferings and inordinate delay in settling the claim.
15. Payment shall be made within one month from the date of receipt of this order.
16. Complaint is allowed and disposed of in aforesaid terms.
17. A copy of the order as per the statutory requirements be forwarded to the parties free of charge and also o the concerned District Forum and thereafter the file be consigned to Record Room.
18. Announced on 21-04-2008.
(Justice J.D. Kapoor) President (Rumnita Mittal) Member jj