State Consumer Disputes Redressal Commission
M/S. Msp Metallics Ltd. vs Royal Sundaram Alliance Insurance Co. ... on 7 January, 2015
STATE CONSUMER DISPUTES
REDRESSAL COMMISSION
WEST BENGAL
11A, Mirza Ghalib Street,
Kolkata - 700087
Complaint Case No.
CC/27/2012
1.
M/s. MSP Metallics Ltd.
16/5,
Block - "A", New Alipore, Kolkata - 700 053.
...........Complainant(s)
Versus
1.
Royal Sundaram Alliance Insurance Co. Ltd.
"Millenium
City", Information Technology Park, Unit Nos. T-2-2A, Tower - II,
Plot No. DN-62, Sector-V, Salt Lake, Kolkata - 700 091.
2.
Royal Sundaram Alliance Insurance Co. Ltd.
21,
Patullas Road, Chennari - 600 002.
............Opp.Party(s)
BEFORE:
HON'BLE
MR. DEBASIS BHATTACHARYA PRESIDING MEMBER
HON'BLE
MR. JAGANNATH BAG MEMBER
For
the Complainant:
Mr.
Diksha Brata Chaudhuri, Advocate
For
the Opp. Party:
Mr.Debojit
Dutta., Advocate
ORDER
Date:
07-01-2015 Sri Debasis Bhattacharya The facts of the case lie in a short compass that the Complainant took one Erection All Risks Insurance Policy being no. ER00001359000100 from the OP No. 1 in respect of its proposed Steel manufacturing unit at Vill. Markuta, District Jharsuguda, Orissa. The said project site sustained extensive damage due to storm/ typhoon on 24-05-2010, 27-05-2010 and 28-05-2010. On receipt of information about such natural calamity from the Complainant, the OP No. 1 confirmed vide email dated 31-05-2010 that the Surveyor would visit the project site on 01-06-2010 to conduct survey and accordingly, one Surveyor, Mr. S.K. Das carried out due inspection of the project site and after completion of the inspection, the said Surveyor vide his letter dated 04-06-2010, asked the Complainant to submit claim form together with requisite documents and accordingly, the Complainant submitted claim form dated 21-08-2010 duly filled up for a sum of Rs. 29,97,418/-. The said Surveyor conducted survey at the project site in presence of the representative of the Complainant and thereafter, submitted his survey report to the OP insurer on 05-02-2011. On the basis of said Survey Report, the insurer repudiated its claim vide letter dated 22-02-2011. In the said survey report, the Surveyor assessed the loss at Rs. 13,28,403/- without considering the pending re-instatement bills and resorted to a baseless, imaginary ground of minimum applicable excess for Act of God, i.e., Rs. 20,00,000/- as per policy with the sole intention to repudiate the legitimate claim of the Complainant.
The Complainant though exchanged several correspondences with the OP insurer, it did not yield any positive result. In such circumstances, the Complainant filed the instant case for reimbursement of insurance claim to the tune of Rs. 29,97,418/- and another sum of Rs. 1,00,000/- as compensation together with interest @ 12% p.a. from 20-02-2011 over Rs. 29,97,418/-.
On notice, OP insurer appeared and contested the case by filing written version, whereby they, inter alia, denied all the material allegations of the Complainant. It is stated by the OPs that the instant case is not maintainable under the Consumer Protection Act, 1986 since the Complainant is not a Consumer within the meaning of Section 2(d) of the said Act. The policy in question provides for express stipulation that for the Act of God Perils, a sum of 10% of the claim amount shall be compulsorily deducted under the policy excess clause subject to a minimum of Rs. 20,00,000/-. In other words, the Complainant cannot lay a claim if the claim amount stands below the threshold limit of Rs. 20,00,000/-.
The IRDA licensed Surveyor clearly indicated in the survey report that the OPs do not have any liability as gross assessed amount of Rs. 13,28,403/- is less than the minimum deductable amount under policy as per the policy excess clause for the Act of God peril. Therefore, they have rightly repudiated the claim.
Both the Complainant as well as the OPs submitted evidence and were cross-examined by the other side by means of questionnaire.
In view of the claim and counter-claim of the parties concerned, the following points are framed for proper adjudication of the case.
1) Is the claim maintainable?
2) Is there any deficiency in service on the part of the OPs, as alleged by the Complainant.
3) Is the Complainant entitled to any relief as prayed for?
Decision with reasons Point No. 1 Ld. Advocate for the Complainant has submitted that the instant case is maintainable under the Consumer Protection Act, 1986.
Ld. Advocate for the OP insurer has made a strong pitch for dismissal of the instant case disputing the status of the Complainant as a Consumer under Sec. 2(1)(d) of the Consumer Protection Act, 1986. It is argued by the Ld. Advocate that the manufacturing unit in question was built for the purpose of earning profit, i.e., were meant for commercial purpose.
Profit being the sole driving force behind setting up of the said manufacturing hub, the present complaint filed by the Complainant is liable to be dismissed. He further argued that admittedly, the Complainant is a big commercial conglomerate whose annual turnover runs into crores of rupees.
Therefore, there is no question of earning livelihood by means of self-employment by the Complainant. So, it is submitted by the Ld. Advocate that the instant case should be dismissed being not-maintainable under the purview of the 1986 Act.
It is true that the Complainant is a Limited Company and there can be no manner of doubt as to the fact the intended project site was meant for producing company products for commercial purpose.
However, we have to keep in mind that the contract of insurance is a contract of indemnity. Differently put, an insurance policy is obtained to safeguard oneself from the losses arises out of unforeseen eventualities.
Needless to say, therefore, there is no question of commerce behind taking an insurance policy.
It is for protection and not for making any profit. Therefore, it would be totally unjustified to conclude that as because the Complainant is carrying on business, they do not qualify as a Consumer as defined under Section 2(1)(d) of the Consumer Protection Act.
In this regard, the observation of Honble National Commission in the matter of Harsolia Motors vs. National Insurance Co. Ltd., reported in I (2005) CPJ 27 (NC) is worth mentioning.
At the outset, it is to 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 of 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 the light of above observation of the Honble Apex Commission, we hold that merely because the Complainant is running a relatively bigger commercial venture, he cannot be deprived of seeking remedy under the 1986 Act.
This point is, thus, decided in favour of the Complainant.
Point Nos. 2& 3:
Both these inter connected points are taken up together for the sake of convenience of discussion.
Ld. Advocate for the Complainant has made out that when they received the policy in question, it contained schedule spreading over two pages, which was in conformity with the Quotation and Held Cover Note issued by the insurer prior to issuing the said policy and there was no such page no. 3 or page no. 4 which allegedly contain excess clause and endorsement for fire/explosions explosions claims and firefighting. Clearly the OPs manufactured the said schedules to deny the Complainant of its legitimate due. It is alleged by the Ld. Advocate that the Surveyor most illegally and arbitrarily repudiated the claim of the Complainant citing minimum excess clause, though fact remains that no such exemption clause was incorporated in the quotation of the Insurer nor the same had been accepted by the Complainant. It is the settled position of law that after completion of the contract, no material alternation can be made in its terms and conditions without mutual consent of concerned parties. He has referred to a decision of the Honble Supreme Court in Civil Appeal Nos. 6075-76 and 11443-44 of 1995, in the matter of United India Insurance Co. Ltd. Vs. M.K.J.Corporation, four decisions of the Honble National Commission reported in 2012 (3) CPR 225 (NC), 2013 (1) CPR 81 (NC), 2014 (3) CPR 172 (NC) and 2014 (3) CPR 267 (NC), one decision of Honble High Court, Jodhpur in S.B.Civil Misc. Appeal No. 596/1997, 767/1997 and 726/1997.
On the other hand, Ld. Advocate for the OP Insurance Company has submitted that although the Complainant has doubted the existence of schedule contained in page nos. 3 and 4 of the policy in question, admittedly they have gone through the details of terms and conditions of the policy in question and therefore, page nos. 3 and 4 of schedule being an integral part of the policy, the Complainant cannot deny receipt of the same. It is argued by the Ld. Advocate that had it been so, the Complainant would definitely have brought the matter to the notice of the OP insurer immediately after receipt of the policy papers. In furtherance of his argument, it is submitted by the Ld. Advocate that all general insurance companies in India are licensed by IRDA and as per provisions of Sections 64(U) and 64(UC) of the Insurance Act, 1938, all terms and conditions of an insurance policy are framed then by TAC which has now been substituted by IRDA. Likewise, save and except total amount of coverage, the terms and conditions of the policy in this case too are framed by the IRDA and in the policy wordings, there is specific mention about policy excess clause. In this regard, the Ld. Advocate has referred to the observation of the Honble Supreme Court reported in AIR 1966 SC 1644 wherein the Honble Court has observed that Even if no terms are specified, the terms contained in a policy customarily issued in such cases, would apply. There is ample authority for the proposition. In Corpus Juris Secundum (Vol. 44, p. 953), the following occurs: Where the contract to insure or issue a policy of fire insurance does not specify the terms and conditions of the policy, it is a general rule that the parties will be presumed to have contemplated a form of policy containing such conditions and limitations as are usual in such cases....... It is argued by the Ld. Advocate that such guideline being framed by the Honble 5 Judges Bench of the Honble Apex Court is the law of the land and under Article 141 of the Constitution of India upon all the subordinate Courts within the territory of India. It is further argued by the Ld. Advocate that although the Complainant has estimated his loss at Rs. 29,97,417/-, the same is only an estimate and there is no proof of incurring of such expenses. Besides, in the said estimate the Complainant has claimed that all the AC sheets and asbestos sheets of the two different factories got damaged because of the storm occurred on the alleged date of occurrence, happening of the same is next to impossible in reality. Besides, not only the price of those sheets shown were very much on the higher side, fitting charge of such sheets had been shown @ 20% and again labour charge @ 45% has been claimed. The estimate is only a computer printout and not certified by any expert or organization and as such, it has no evidentiary value. On the other hand, the Surveyor assessed the loss at Rs. 13,28,403/-, against which no counter evidence or survey report or expert opinion has been brought on record. Accordingly, it is clear that the actual amount of loss sustained in this case by the Complainant was Rs. 13,28,403/- and the same amount being within the limit of policy excess itself, there is absolutely no liability of the OP insurer to pay any claim to the Complainant.
Accordingly, by repudiating the claim, they have committed no deficiency in service and therefore, the instant appeal should be dismissed with cost. In support of his contention the Ld. Advocate has referred to the five decisions of the Honble Supreme Court reported in (2010) 3 WBLR (SC) 62, AIR 1999 SC 3252, AIR 2009 SC 2834, I (2009) CPJ 6 (SC), AIR 1966 SC 1644 and (2000) 10 SCC 19 and one decision of this Commission in Case No. FA/52/2012.
It is the admitted position of this case that the Complainant filed his claim for a sum of Rs. 29,97,417.96. Also admitted is the fact that the so called Excess Clause comes into force when the claim amount stands below Rs. 20,00,000/-. Therefore, it can reasonably be inferred that application of said clause depends on the quantum of claim being lodged by an insured and not on the extent of loss assessed by the Surveyor. Accordingly, without delving into the dispute as to whether page nos. 3 and 4 of the policy schedule were indeed sent to the Complainant along with other papers or not, given the fact that the quantum of claim amount is far above the threshold limit as specified in the so called Excess Clause, we see no reason whatsoever as to why the Complainant would not be eligible for insurance benefit under the policy in question. The contention of the OP insurer in this regard is totally a misnomer. We have no hesitation, whatsoever, to hold that the OP insurer intentionally misinterpreted the alleged Excess Clause to deny the Complainant its legitimate due, which is tantamount to unfair trade practice/deficiency in service.
Now coming to the issue of loss assessed by the Surveyor, we find that the Surveyor had taken into consideration the eligibility of the Complainant in respect of all the items mentioned by the Complainant while preferring its claim. Though it is alleged by the Complainant that the OP insurer did not take into consideration some of the bills/pending reinstatement bills being sent to the OP insurer, they have not furnished any copy thereof on record. While they raised an issue, it was incumbent upon the Complainant to corroborate it by furnishing cogent document to prove it. At the same time, if the Complainant had any reservation about the loss assessed by the Surveyor deputed by the OP insurer, they could have reassessed the loss by another IRDA approved Surveyor.
Therefore, we are of the view that the Complainant has remained unsuccessful in its endeavour to establish their claim for a sum of Rs. 29,97,418/-. The report of a Surveyor is undoubtedly a vital piece of document that has to be given due wattage as the Surveyor is an independent expert; it is generally binding, unless the flaws therein can be substantiated and proved. Considering this we are of the view that the Complainant is entitled to a sum of Rs. 13,28,403/- as insurance benefit from the OPs together with an interest @ 9% from the date of filing of the case, i.e., on 17-02-2012 till full and final settlement.
These two points are, thus, also decided in favour of the Complainant.
Hence, ORDERED that the complaint case be and the same is partly allowed on contest against the OPs. OPs are directed to jointly and severally pay Rs. 13,28,403/- to the Complainant as insurance benefit along with interest @ 9% p.a. over this amount from 17-02-2012 till full and final settlement, and to pay the decretal amount within 45 days from the date of issue of this order.
JAGANNATH BAG DEBASIS BHATTACHARYA MEMBER MEMBER