State Consumer Disputes Redressal Commission
M/S Tarun Kanti Choudhury vs Oriental Insurance Co. Ltd on 21 March, 2013
State Consumer Disputes Redressal Commission State Consumer Disputes Redressal Commission West Bengal BHABANI BHAVAN (GROUND FLOOR) 31, BELVEDERE ROAD, ALIPORE KOLKATA 700 027 SC.CASE NO. : CC/56/2009 DATE OF FILING : 04.08.2009 DATE OF FINAL ORDER: 21.03.2013 COMPLAINANT : 1. M/s. Tarun Kanti Choudhury, A partnership Firm registered under Partnership Act, being represented by its Partner, Mr. Tarun Kanti Choudhury, Having its office at 24, Raja Peari Mohan Road, Uttarpara, Hooghly. OPPOSITE PARTIES : 1. Oriental Insurance Co. Ltd., Oriental House, Post Box No. 7037, A-25/27, Asaf Ali Road, New Delhi-110002. 2. Branch Manager, Oriental Insurance Co. Ltd. Dutta Super Market, (1st Floor), Akhan Bazar, Chinsurah, Hooghly. 3. Divisional Manager, Oriental Insurance Co. Ltd. Having his office at P-4, Dobson Lane, 4th Floor, Howrah-711 101. 4. Regional Manager, Oriental Insurance Co. Ltd., Having his office at 4, Lions Range, Kolkata-700 001. 5. Insurance Regulated Authority of India Ltd., Having its office at Parishrama Bhawanam, 5-9-58/b, Bashurbagh , Hyderabad-500 004. 6. Union of India, Through the Secretary, Ministry of Finance, service through 11, Strand Road, Kolkata- 700 001. BEFORE : MEMBER : MR. D.BHATTACHARYA MEMBER : MR. J.BAG FOR THE COMPLAINANT : Mr. Saikat Mali., Ld. Advocate. Mr. S.S. Banerjee., Ld. Advocate. FOR THE OPPOSITE PARTIE.: Mr. Debjit Sinha, Ld. Advocate. Mr. Sujib Kr. Chakraborty., Ld. Advocate. Mr. Prasanta Banerjee., Ld. Advocate. : O R D E R :
Mr. J.Bag, Ld. Member The present complaint in brief is as follows:
The Complainant M/s Tarun Kanti Chaudhury purchased on 20.08.2007 a Fire and Special Perils Insurance Policy bearing No. 311702/11/2008/145 from the Oriental Insurance Co Ltd. in respect of repair and maintenance of a 5- km road (completed) constructed from Muchighata to Nadippur the District of Hooghly the police was valid for the period from 22.8.2007 to 21.8.2008. The sum insured was Rs.2,12,23800 (Two crore twelve lakh twenty three thousand and eight hundred) only. The road was severely damaged by flood, the Complainant after due intimation to the O.P. Insurance Company lodged a claim worth Rs.48,49,365.22 before the O.P who engaged a Surveyor for inspection of the property / affected area on or about 30.09.07 and arranged for a joint inspection of the damaged road on 22.12.2007. Thereafter, in March 2008 Survey Report containing an assessed loss of Rs. 24, 83,977/- was prepared, but allegedly the claim of the Complainant was not processed for several months. In acknowledging the receipt of a reminder letter of the Complainant for settlement of the claim preferred the O.P. insurance company on 18. 02.2008 asked the complainant, as a matter of reminder, to furnish the Contract Data without delay. In spite of furnishing of required documents by the Complainant and also after renewal of the insurance policy for the period from 22.8.2008 to 21.08.2009, the O.P. Insurance Company by their letter dated 13.03.2009 repudiated the claim . Hence, in filing a petition of complaint, the Complainant prayed before this Commission for direction for an award of Rs.25,00,000/-
towards compensation and also for withdrawal of the letter of the O.P. Insurance Co. dated 11.05.2009 by which the insurance company cancelled the insurance policy and refunded the premium amount of Rs.66 000/- and also prayed for an interim order of stay of all operations and effect of the cancellation of the said letter.
Notice being served upon the O.P. insurance co. for appearance, the said O.P. filed an application for order on the point of maintainability of the complaint under No. M.A.263/09 which was on
14. 01. 2010 disposed of against the complainant dismissing the complaint. The order was appealed against before Honble National Commission under FA No. 71/2010. Thereafter, as directed by Honble National Commission for hearing of the case afresh. OP was asked to file written version against the petition of complaint.
In their written version the O.P.s submitted inter alia that the petition of complaint suffers from suppression of facts and also from mis-joinder and non-joinder of necessary parties. They mentioned that the petition of complaint was filed by the partnership firm claimed to be registered, without disclosing evidence of registration of the partnership as stipulated in section 69(2) of the Indian Partnership Act 1932. They also mentioned that as per the Bid Documents the loss and damage due to natural calamities was the employers risk while clause 12 of the Bid Document provided for contractors risk of loss and damage due to physical property and personal injury. It was also pointed out that the contractor shall have insurance cover in the joint names of the employer and itself at his own cost from the date of completion to the end of defect liability period covering the contractors risk personal injury or death. The Complainant in suppression of the terms of contract for work wanted to make commercial gain by making fraudulent claims in his own name without including the name of the employer who entrusted the work. Though stipulated in the tender clause, the policy of the petitioner Complainant revealed that it was taken contrary to terms as stipulated in the bid document in respect of the work for maintenance and repair work. Accordingly, the insurer O.P. revoked and cancelled the policy and refunded the amount paid on account of premium for renewal of the policy in terms of the general agreed condition of policy. They denied any deficiency in service on their part and prayed for rejection of the complaint petition.
We have gone through the complaint and perused all records including evidence on affidavit for and on behalf of the O.P., reply of the Petitioner to the questionnaires filed by the O.P, evidence in affidavit on behalf of the Complainant namely M/s Tarunkanti Chowdhury, the Standard Fire and Special Perils Policy valid from 22.08.2007 to 21.08.2007 and also renewed for the period from 22.8.08 to 21.8.2009, Survey Report submitted by consultant engineer Bapi Chowdhury, Partha Chowdhury, the repudiation letter dated 13.3.2009 and also copy of bidding documents.
An examination of the letter of repudiation dated 13.03.2009 sent by the O.P. to the Complainant shows that, as alleged, the Complainant did not have insurable interest in terms of clauses 11.1, 12.1 and 13.3 of the Complainant was to provide insurance in terms of clause 13.3 of the bid documents for Pradhan Mantri Gram Sadak Yojona (PMGSY) at his cost in the joint names of the employer i.e., the Executive Engineer and the contractor. The contract data provided that the contractors risk was limited to personal injury or death. The bid documents also provided that the insurance policies and certificates for insurance shall be delivered by the contractor to the Executive Engineer for his approval before the completion. The employers risk covered the risk of work, invansion, natural calamities and contaminations from any nuclear field or nuclear waste or radio active toxic explosive etc while the contractors risk covered risk of loss of or damage to physical property and of personal injury and death which arise during and in consequence of the performance of the contract other than excepted risk referred to in clause 11.1clause 13.1 of the bid.
The Complainant in his evidence submitted inter alia that any damage to the project within the defect liability period i.e., five years from the date of completion has to be repaired by the contractor Company at their own costs and that since the insured property was damaged due to natural disaster they lodged the claim before the O.P. on 27.09.2007 informing the manager of the insurance company about the damage and to bear the cost of repair of the said road. The letter bearing No. 1032A dated 28.09.07 of the Executive Engineer clarifies that any damage to the project in question up to the end of the defect liability period (five years) is to be repaired by the contractor at their own cost and accordingly, he was asked to do the needful. The Contract Data, however, is not what the Executive Engineer wanted to mean. The Contract Data which was asked to be submitted by the Complainant was submitted on 25.02.09 and it was after going through the Contract Data that the O.P. made certain observations which included that the insurance was obtained by suppression of some material facts.
Ld. Advocate appearing for the Complainant submitted that the insurance company did not ask for any information as to whether the property to be insured was owned by him as owner or otherwise. The policy covered the risk of any damage to the maintenance of the property which was the responsibility of the contractor himself. There was no suppression of fact as to the status of the partnership firm. He actually submitted the copy of the certificate of the registration of the partnership firm as proof of registration of the firm.
Ld. Advocate appearing for the O.Ps argued that the work of road construction being over, possession of the same was handed over to his Employer being the West Bengal State Rural Development Agency, Government of West Bengal and the Contractor being the Employee in terms of the guide lines of the Pradhan Mantri Gram Sadak Yojojana should not have insured the road in his own name alone as he is neither owner nor vender nor lesser nor lessee nor a trustee in respect of the road. The Complainant did not have any insurable interest over the constructed road. The Complainant was required to obtain insurance coverage in the joint names of his own as well of the employer was clearly stipulated In suppression of the said terms he obtained insurance to the exclusion of the name of the actual owner of the property in violation of clause 13.1 of the tender document. It was contended that insurance may be terminated at any time at the request of the insured, in which case the company will retain the premium of customary short period rate for the time the policy has been enforced. And the insurance may also be terminated at the option of the company, on 15 days notice to that effect being given to the insured, in which case the company shall be liable to repay on demand a ratable proportion of the premium for the unexpired term from the date of the cancellation.
After perusal of all records and material evidence it appears that the Complainant contractor was under
obligation in terms of the Bid Document to obtain insurance coverage in the joint names of the Employer i.e, the Executive Engineer WBSRDA , Hooghly Division and in his own name as Employee. He did not follow the instruction laid down under the scheme relating to the insurance requirement of the work entrusted to him under PMGSY. There appears to be suppression of material information before purchasing the insurance cover and the insurance company had cancelled the insurance policy in the present case on the ground of suppression of material information. The Complainant fails to establish his claim in so far as the insurance policy was obtained with suppression of material fact. The Complaint does not stand. We are therefore, inclined to dismiss the complaint and Hence, Ordered that the complaint be and the same is dismissed on contest. There shall be no order as to cost.
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MR. J.BAG MR. D.BHATTACHARYA MEMBER MEMBER