State Consumer Disputes Redressal Commission
New India Assurance Company Ltd. vs K.R.B.L. Ltd. on 22 May, 2014
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
First Appeal No.208 of 2010
Date of institution : 11.02.2010
Date of decision : 22.05.2014
NEW INDIA ASSURANCE CO. LTD. HAVING ITS REGIONAL
OFFICE AT SCO NO.36-37, SECTOR 17-A, CHANDIGARH
THROUGH ITS DULY CONSTITUTED ATTORNEY SHRI K.B.
BINDAL, MANAGER.
.......APPELLANT/OPPOSITE PARTY
VERSUS
K.R.B.L. LTD. THROUGH ITS DIRECTOR SHRI MAHESH CHAND
JAIN, VILLAGE BHASAUR, TEHSIL DHURI, DISTRICT SANGRUR.
......RESPONDENT/COMPLAINANT
First Appeal against the order dated
30.12.2009 of the District Consumer
Disputes Redressal Forum, Sangrur.
Quorum :-
Hon'ble Mr. Justice Gurdev Singh, President.
Mr. Vinod Kumar Gupta, Member
Mrs. Surinder Pal Kaur, Member.
Present:-
For the appellant :Shri Parminder Singh, Advocate. For the respondent :Shri Sandeep Khunger, Advocate. JUSTICE GURDEV SINGH, PRESIDENT :
The complainant-company availed of the services of the opposite party by getting its Rice Mill (entire machinery, all the products and building etc.) insured for the period 2.4.2007 to 1.4.2008 after the payment of Rs.4,13,250/-, as premium. Every type of loss was covered under the policy issued in its favour after the obtaining of the pre-inspection report through the Surveyor of the First Appeal No.208 of 2010. 2 opposite party. The cooling tower of the Mill was damaged on the night intervening 6/7.9.2007 and the loss to the same was assessed by the complainant at Rs.19,11,490/-. The opposite party also appointed the Surveyor for assessing the loss, who collected all the papers from the complainant for settlement of the claim made by it regarding the loss so suffered. The opposite party refused to pay the claim by declaring the same as "no claim". Feeling aggrieved, the complainant filed complaint under Section 12 of the Consumer Protection Act, 1986, before the District Consumer Disputes Redressal Forum, Sangrur (in short, "District Forum") alleging therein that the cooling tower was damaged due to heavy storm and rain and that the sum of Rs.19,11,490/- had already been paid to M/s Paltech Cooling Tower, authorized dealer, for the repairs of the cooling tower. The opposite party appointed the Surveyor of its choice, who made his report by ignoring the factual position at the spot and the copy of that report was never supplied to it in spite of repeated demands. The claim so submitted could not have been declared as "no claim" as the conditions of the policy were never supplied to it. By not paying the claim amount the opposite party committed deficiency in service. It prayed for issuance of directions to the opposite party to pay the above said amount, along with interest and compensation, on account of mental agony and harassment.
2. The opposite party filed written reply, in which it pleaded that the insurance policy was received by the complainant through the independent service facilitator; namely, M/s Madhav Brokers Pvt. First Appeal No.208 of 2010. 3
Ltd., who worked as the intermediator between them and who had been approved by I.R.D.A. and, as such, the complainant was well aware of the terms and conditions of the insurance policy. The complainant himself had submitted the proposal form and made a specific request to attach the same with the insurance policy. The alleged cooling tower was not a part of the machinery and was not mentioned as such in the proposal form. Therefore, the same was not covered under the policy. The same was never damaged due to heavy storm or rain. The complainant might have got the same reinstalled as fresh at its own and it has nothing to do with the occurrence of the peril. No intimation regarding damage to the cooling tower was given to it though such information was required to be given within 15 days from the day of loss. However, the complainant had written the letter dated 4.7.2008 for the first time after a gap of one year. Even the said M/s Madhav Brokers Pvt. Ltd. had written to it on 18.2.2009 and the same was properly replied. No surveyor was ever deputed by it and he might have been deputed by M/s Madhav Brokers Pvt. Ltd. with the connivance of the complainant in order to grab the public money. The report by the said Surveyor was submitted as per the wishes of the complainant. In the proposal form submitted by the complainant there was a clear- cut instruction to pass on and share the risk with M/s Reliance General Insurance Company Limited upto 40% of the total risk, by parting with the premium of 40%, which was paid to that Insurance Company. That Insurance Company became a co-insurer to meet with any eventuality. It also pleaded that the Plant appears to be 20 First Appeal No.208 of 2010. 4 years old and remained idle for many years resulting in deterioration thereof. The normal wear and tear loss might have occurred to the old structure and the same cannot be terms as accidental. It's representative was never allowed to inspect the alleged loss nor the alleged damaged portion was shown to it. That alleged damaged structure is in the middle of the factory and it is hard to believe that the damage would occur to that part only. There is no authentic proof regarding the alleged storm on the night of 6/7.9.2007 and the complainant is trying to play a fraud to grab the public money. As per the conditions of the insurance policy, in case of fraud all the benefits under the Policy are forfeited. The complaint filed by the complainant is bad on account of non-joinder of Reliance General Insurance Company Limited, who was to bear the loss to the extent of 40%. The complainant has not come to the District Forum with clean hands. It prayed for the dismissal of the complaint with Rs.20,000/- as costs.
3. Both the sides produced the evidence in support of their respective averments before the District Forum, which after going through the same and hearing learned counsel on their behalf allowed the complaint, vide order dated 30.12.2009 and directed the opposite party to pay Rs.19,11,290/- in lieu of consolidated amount of compensation. Feeling aggrieved by that order, the present appeal has been preferred by the opposite party.
4. We have heard learned counsel for both the sides and have carefully gone through the records of the case.
First Appeal No.208 of 2010. 5
5. It was submitted by the learned counsel for the opposite party that the District Forum was required to dismiss the complaint for non- joinder of M/s Reliance General Insurance Company Limited, as it was proved on the record that on the instructions of the complainant 40% of the risk under the insurance policy was transferred to that Insurance Company and the opposite party parted with 40% of the premium in favour of that Insurance Company. It was wrongly concluded by the District Forum that M/s Reliance General Insurance Company Limited was not necessary party. He further submitted that the complainant miserably failed to prove on the record that the loss to the cooling tower was caused by means of storm or rain. As per the terms and conditions of the insurance policy, the opposite party was liable to pay the loss for the damage caused by storm and not for the loss caused otherwise. The claim made by the complainant was correctly held to be "no claim" and the finding recorded by the District Forum to the contrary is liable to be set aside.
6. On the other hand, it was submitted by the learned counsel for the complainant that as per Co-Insurance Agreement, the main liability, as per the Regulations of the General Insurance Council, was that of the opposite party itself and no such loss was to be paid by the co-insurer, even if it was proved on the record that after the parting with the 40% of the premium by the opposite party M/s Reliance General Insurance Company Limited had agreed to share the loss to the extent of 40%. Therefore, it cannot be said that the said Insurance Company was necessary party and the complaint First Appeal No.208 of 2010. 6 was not maintainable in the absence of that Insurance Company. He further submitted that a correct finding was recorded by the District Forum regarding the loss caused to the cooling tower as a result of storm on the basis of the evidence produced before it and which consists of the affidavit of Mahesh Chand Jain, Director of the complainant, Ex.C-19 and the report of Parveen Kumar Goyal, Surveyor and Loss Assessor, Ex.R-11, which has been proved on the record by the opposite party itself. From the evidence so produced, it also stands proved that as a result of storm, loss to the cooling tower was caused to the extent of Rs.19,11,290/- and by virtue of the insurance policy proved as Ex.C-1, that amount is liable to be paid by the opposite party and it committed an illegality while repudiating the genuine claim of the complainant as "no claim".
7. At the time of arguments the evidence produced on the record that on the request of the complainant itself 40% of the risk under the policy was transferred in favour of M/s Reliance General Insurance Company Limited, who shared 40% of the premium paid by the complainant for getting the insurance policy, was not challenged. In fact, the same could not have been challenged in view of the letter dated 29.3.2007 proved on the record by the opposite party as Ex.R1. This letter was written by the complainant to the opposite party and the relevant portion thereof is reproduced below:-
"We are going to place our Dhuri Plant fire Insurance as a leader to your company with 60% share and 40% share to Reliance General Insurance Co. Ltd., Branch Office, Ludhiana. First Appeal No.208 of 2010. 7 This business should be booked through our broker M/s Madhav Insurance Brokers Pvt. Ltd., Regd. Office, Ahmedgarh."
8. The General Insurance Council was set up to represent the collective interest of the general insurance operating in India. This Council considered the issue regarding the mechanism of co- insurance arrangements in Indian market and it formulated a Co- insurance Agreement in February 2002 with a view to regulating the transaction of co-insurance business in general and specifically with regard to (a) the placement of risks; (b) the collection and distribution of premium; (c) the administration of claims; and (d) the apportionment of liability. As per that Agreement, the lead insurer is responsible for negotiating the premium, collecting the premium etc. The lead insurer is also made responsible for handling the claims, including their investigation, settlement and payment. It is also provided in that Agreement that the claims expenses and payments in the first instance are to be paid by the lead insurer and then the same can be recovered from the co-insurer, according to their shares. This General Agreement makes it very much clear that the opposite party, which was the lead insurer, was to receive the premium and all the claims under the policy were to be made to it and in the first instances the claims were payable by it though it could have recovered that part of the amount, so paid as claim, to the extent it had agreed to share the loss with the Reliance General Insurance Company Limited. Therefore, it cannot be held that the said Insurance Company was a necessary party and the dispute First Appeal No.208 of 2010. 8 could not have been decided in its absence completely and effectively. A correct finding to that effect was recorded by the District Forum and the same is hereby upheld.
9. The complainant proved on record letter dated 2.3.2009 Ex.R5, vide which the claim made under the insurance policy was repudiated by the opposite party. No doubt, it is mentioned in this letter that the claim made by the complainant had been filed as "no claim" but it is also mentioned therein that the said claim was not tenable in the absence of any authentic proof to substantiate the occurrence of covered perils caused to the alleged damage to the insured property. According to the terms and conditions of the insurance policy proved on the record as Ex.R-7, the opposite party was liable to pay for the loss, destruction or damage directly caused by storm. In order to substantiate the allegation made in the complaint that the damage/loss was caused to the cooling tower by storm and rain on the intervening night of 6/7.9.2007, the complainant proved on record the affidavit of Mahesh Chand Jain, Director, Ex.C-19, in which he deposed about all the allegations made in the complaint. In addition to that the complainant is relying on the report of Parveen Kumar Goyal, Surveyor and Loss Assessor, Ex.R-11.
10. Before discussing that report and in view of the averments of the parties, it is to be seen as to who appointed this Surveyor? In the report nothing has been said by this surveyor as to by whom he was appointed. In fact, that report was proved by the opposite parties in order to show that the complainant is relying upon the First Appeal No.208 of 2010. 9 report of the Surveyor, who was never on its panel. It proved on record the lists of panel of the Surveyors Ex.R-9 and Ex.R-10 and the name of this Surveyor does not figure in those lists. The complainant did not mention the date on which it sent the intimation about the damage to the cooling tower to the opposite party. The fact that such intimation was sent has been stated in the complaint after the facts that the loss caused to the tower was to the extent of Rs.19,11,490/- and that was the amount paid to the Company, who repaired it. The order in which those facts have been stated shows that such intimation was sent to the opposite party only after the repair of the cooling tower. Then how is it that the Surveyor mentioned in its report that he surveyed the premises on 8.9.2007 itself after having received the instructions on that date? The fact that no such Surveyor was appointed by the opposite party was substantiated by the affidavit of S.K. Sofat, Sr. Divisional Manager, Ex.R-8. From the evidence produced on the record and the circumstances, it stands proved that this Surveyor was appointed by the complainant itself.
11. In his report Ex.R-11 he did not state in his conclusion as to whether the loss/damage to the cooling tower was on account of storm or whether any storm ever occurred on the intervening night of 6/7.9.2007. The relevant portion of his report is reproduced below:-
"1. Verification of loss--The Insured addressed a letter dated 17.12.2007 to the Tehsildar, Dhuri stating "that on the night of Sept. 6, 2007, a heavy wind storm caused damages to our Plant & Machinery and also took away First Appeal No.208 of 2010. 10 Tarpaulins from the Paddy stocks which resulted into huge financial losses and further requested to verify the loss caused by storm on the aforesaid date. The Tehsildar marked the letter to Halqa Patwari. The Halqa Patwari submitted his report on the reverse of Insured's request letter as under:-
"As per your order, I have gone to M/s KRBL Ltd. Bhasaur for spot verification and contacted Shri Jatinder Vardhan, Sr. Manager (HR) who is present at site, who reported that on 6.9.2007, a storm had come due to which Cooling Tower belonging to M/s KRBL Ltd. had been broken and in addition to this the plants were also got broken and paddy also got damaged due to Tarpaulin which got torn out. There was no casualty. After spot verification, the report dated 15.1.2008 is being submitted for further action.
Thereafter, another officer sent the report to Tehsildar, Dhuri along with Patwari Report and the Tehsildar countersigned the Report.
2. Photocopy of the Punjabi Newspaper dated 8.9.2007 showing the loss of crops due to rains and high velocity winds as on dated 6.9.2007/7.9.2007 at the adjoining First Appeal No.208 of 2010. 11 areas Lehragaga (app. 35 KMs from the Insured's location and at Cheema Mandi).
3. Photocopy of the Commodity online Monsoon Meter; Rains and Commodities India, showing scattered rainfall on 6th Sept. 2007 over Punjab and"
12. Whatever has been mentioned in this para was not substantiated by the reports mentioned therein. As per contents of this para, there was only scattered rainfall and that too only on 6.9.2007. It cannot be concluded from this report that the loss or damage to the cooling tower was on account of the storm. It is not mentioned in the report that the Patwari had given his report that the damage to the cooling tower was caused as a result of the storm and it is mentioned therein that it was reported to that Patwari by the Senior Manager that the cooling tower had broken on account of the system. Firstly, the Patwari himself has nowhere reported that there was a storm on the alleged night nor he has reported that the damage or loss was caused to the cooling tower as a result of such storm. Secondly, he is not an expert in that field and his official duties are confined only to keep the revenue record upto date and to note down the rainfall etc. and loss to the crops. Only the building expert could have found out that the loss or damage was on account of some storm. Even the report of the Weather Department regarding the storm was never proved on the record. The deposition made by the complainant in his affidavit Ex.C-9 that the damage was caused on that account was duly rebutted by S.K. Sofar, Senior Divisional Manager in his affidavit Ex.R-8. First Appeal No.208 of 2010. 12
13. The onus was upon the complainant for proving that the loss/damage was caused to the cooling tower on account of storm and he has failed to discharge that onus. From the evidence produced on the record, it cannot be held that the loss/damage was on that account.
14. Confidence in the correctness of the above said finding is further inspired from the fact that as per the inspection report Ex.C15 and the Map Ex.C-16 of Arun Mehta, Surveyor, which was conducted before the issuance of the insurance policy the said cooling tower is situated in close proximity of the main Plant and was surrounded by that Plant from three sides. Strangely, Parveen Kumar Goyal, Surveyor and Loss Assessor, found that cooling tower collapsed and got damaged and that there was no damage to the abutting and adjoining Plant, which is not possible in any circumstances.
15. When the loss/damage was not on account of the storm, the opposite party was justified in repudiating the claim of the complainant on that ground. A wrong finding to the contrary was recorded by the District Forum, which is liable to be set aside.
16. In the result, this appeal is allowed, the order of the District Forum is set aside and the complaint filed by the complainant is dismissed.
17. The sum of Rs.25,000/- deposited at the time of filing of the appeal along with interest which has accrued thereon, if any, shall be remitted by the registry to the appellant/opposite party by way of a crossed cheque/demand draft after the expiry of 45 days. First Appeal No.208 of 2010. 13
18. The arguments in this case were heard on 14.5.2014 and the order was reserved. Now, the order be communicated to the parties.
19. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE GURDEV SINGH) PRESIDENT (VINOD KUMAR GUPTA) MEMBER (MRS. SURINDER PAL KAUR) MEMBER May 22, 2014.
Bansal