State Consumer Disputes Redressal Commission
Uiic. Ltd. vs Sh. Devinder Singh & Ors. on 22 June, 2009
H H.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION, SHIMLA. --------- RESERVED ON 3.6.2009. DATE OF DECISION: 22.6.2009. In the matter of: FIRST APPEAL NO.476/2007. United India Insurance Co. Ltd. Through its Assistant Divisional Manager, Shimla Division, Timber House, Cart Road, Shimla-171001. . Appellant. Versus 1. Sh. Devinder Singh S/O Shri Hira Singh, 2. Smt. Santosh Kumari W/O Shri Devinder Singh, Both residents of Village Kotli, P.O. Rajgarh, Tehsil Rajgarh, District Sirmour, H.P. Respondents/Complainants. 3. H.P. State Civil Supplies Corporation Ltd., SDA Complex, Kasumpti, Shimla-171009 through its Managing Director. 4. The Incharge, H.P. State Civil Supplies Gas Depot, Rajgarh, Tehsil Rajgarh, District Sirmour, H.P. 5. The Indian Oil Corporation, SDA Complex, Kasumpti, Shimla-9, Through its Area Manager. . Respondents. Present: Mr. Harish Behl, Advocate. For the appellants. Mr. Peeyush Verma, Advocate for respondents 1 & 2. Mr. Jagat Singh Shyam, Advocate, for respondents 3 & 4. Mr. R.S. Verma, Advocate, for respondent No.5. FIRST APPEAL NO.479/2007. 1. H.P. State Civil Supplies Corpn. Ltd., SDA Complex, Kasumpti, Shimla-9, through its Managing Director. 2. The Incharge, H.P. State Civil Supplies Gas Depot, Rajgarh, District Sirmour, H.P. Appellants. Versus 1. Sh. Devinder Singh S/O Sh. Hira Singh, 2. Smt. Santosh Kumari W/O Sh. Devinder Singh, (both residents of Vill. Kotli, P.O. Rajgarh, District Sirmour, H.P.) 3. Indian Oil Corporation, SDA Complex, Kasumpti, Shimla-9, through its Area Manager. 4. United India Insurance Co. Ltd., through its Divisional Manager, Timber House, Cart Road, Shimla-171001. . Respondents. Present: Mr. Jagat Singh Shyam, Advocate, For the appellants. Mr. Peeyush Verma, Advocate, for respondents 1 & 2. Mr. R.S. Verma, Advocate, for respondent No.3. Mr. Harish Behl, Advocate, for respondent No.4. FIRST APPEAL NO.165/2008. Indian Oil Corporation, SDA Complex, Kasumpti, Shimla-9, through its Area Manager. Appellant. Versus 1, Sh. Devinder Singh S/O Sh. Hira Singh. 2. Smt. Santosh Kumari D/O Sh. Devinder Singh, (Both residents of Village Kotli, P.O. Rajgarh, District Sirmour, H.P. 3. H.P. State Civil Supplies Corporation, SDA Complex, Kasumpti, Shimla-9, through its Managing Director. 4. Incharge, H.P. State Civil Supplies Gas Depot. Rajgarh, District Sirmour, H.P. 5. United India Insurance Co. Ltd. through its Divisional Manager, Timber House, Shimla-2, H.P. . Respondents. Present: Mr. R.S. Verma, Advocate, For the appellant. Mr. Peeyush Verma, Advocate, For respondents 1 & 2. Mr. Jagat Singh Shyam, Advocate, for respondents 3 & 4. Mr. Harish Behl, Advocate, for respondent No.5. Honble Mr. Justice Arun Kumar Goel (Retd.), President. Honble Mrs. Saroj Sharma, Member. Honble Mr. Chander Shekher Sharma, Member. Whether approved for reporting? O R D E R
Justice Arun Kumar Goel (Retd.), President.
1. All these appeals have arisen out of the order passed by District Forum, Shimla, in Complaint No.4/2005 on 2.8.2007, as such they were heard together and are being disposed of by this common order.
2. Indian Oil Corporation, hereinafter referred to as the OP No.3 has filed Appeal No.165/2008, H.P. State Civil Supplies Corporation and its Incharge at its Rajgarh Depot, hereinafter referred to as OPs 1 & 2 respectively have filed Appeal No.479/2007 and United India Insurance Company, hereinafter referred to as OP No.4. has filed Appeal No.476/2007 and Sh. Devinder Singh and his wife Smt. Santosh Kumari who filed the complaint are hereinafter being referred to as complainants 1 & 2 respectively.
3. Admitted facts giving rise to these appeals are that OP No.1 is the dealer for the supply of Liquefied Petroleum Gas (LPG in brief) to the consumers like complainant No.1 in different parts of the State. OP No.2 is the depot Incharge at Rajgarh of OP No.1.
4. Cylinders duly filled-in are provided by OP No.3 to OP No.1 and for this purpose, dealership agreement has been entered into between the OP No.1 on one side and OP No.3 on the other. Its copy is Annexure R.3/A. For the purpose of these appeals, Clause No.18 of this agreement which is relevant and was relied on by Shri Verma, is extracted hereinbelow:-
18. xxx xxx xxxx xxxx
(a) The Distributor shall at all times fully and effectively indemnify and keep indemnified the Corporation, its estates and effects from and again all losses, damages, claims, suits, legal proceedings and otherwise howsoever arising from or in connection with any loss or injury to person or property in connection with any of the matters covered by this Agreement or arising in the course of any of the contingencies referred to above or otherwise howsoever.
(b) Without effecting the generality of the indemnity referred to hereinabove, the Distributor shall fully and effectively indemnify and keep indemnified the Corporation, its successors, assigns, estate and effects officers, employees and agents from and against all losses, damages, claims liabilities, suits, legal proceedings or otherwise howsoever arising out of any claims made by all third parties whether on account of injury to person or loss of life or injury, loss or damage to any property and occasioned directly or indirectly and irrespective of the cause or quantification of such loss or damage and in particular in respect of third party claims covering all types of risks and whether on account of any neglect, breach or default in the observance and performance of the Rules and Regulations from time to time framed by the Corporation and or any statutory authority and prevailing in respect of the storage, handling, loading, unloading, licensing, sale, distribution, marketing, transport, connection or disconnection at customers sites or otherwise, supply, delivery and collection of cylinders from the Corporation and/or from the customers in relation to the LPG cylinders, filled or empty, and or the Corporations equipment and or Indane gas or otherwise howsoever on account of non implementation, non-observance or non-performance of the instructions contained in the prescribed Indane Manual or other instructions issued by the Corporation from time to time, or by reason of the breach, non-observance or non conformation with the provisions of the Petroleum Act, 1934, Indian Explosives Act, 1884, Gas Cylinder Rules 1940 and all other Rules, Regulations and Bye-laws made thereunder or any other Statute, Rules, Bye-laws or Acts in respect thereof or in relation to any Municipal licence or permission issued for the purpose of storage by any Central or State Government or legal or statutory public body or authority as may be applicable from time to time or otherwise howsoever arising to the end and intent that the Distributors indemnity to the Corporation shall be enforceable by the Corporation under all circumstances envisaged including any loss or damage that may have resulted on account of any negligence or irregular use or handling by any person for and on behalf of the Distributor or by the customer or any person for and on behalf of the customer and such indemnity shall be unconditional and irrevocable and shall not be discharged absolved or relieved on the ground that the loss or damage has arisen on account of any act or omission of any person over whom the Distributor has no control.
No Warranty by the Corporation
(a) It is specifically agreed and declared between the Corporation and the Distributor that the Corporation has not given nor shall be deemed to have given or agreed to any express or implied warranty as regards the manufacture or use of the LPG cylinders or any other equipment or appliances that may be supplied and delivered under this Agreement and the Corporation shall not be responsible or liable for any defects manufacturing or otherwise arising therefrom.
(b) The Corporation shall, under no circumstances be liable or responsible for any loss, injury, or damage to the Distributor or to the customers, their servants, employees and agents or any other person whomsoever arising on account of any transaction under this Agreement or as a result of the LPG cylinders of the said equipment being in any way defective or in unfit condition (Emphasis Supplied) Xxx xxx xxx xxx xxx
5. In terms of the dealership agreement, OP Nos.1 & 2 had obtained multi perils (L.P.G Dealers ) Package Insurance cover from OP No.4. At the time of hearing, it was admitted inter-se OPs that OP No.4 had issued the insurance cover vide Annexure R.1 the insurance policy. For the purpose of these appeals, Section VII of the Policy is relevant and was relied upon by Shri Behl, its portion which is material for determination of these appeals is extracted hereinbelow:-
VII PUBLIC LIABILITY The Company will indemnify the insured (or in the event of the death of the insured his legal representative) against all sums which the insured shall become legally liable to pay in the event of
(a) accidental bodily injury to any person (not being either a member of the insureds family or a person engaged in and upon the service of the insured at the time of occurrence giving rise to such injury nor a person claiming against the insured under any workmens compensation act)
(b) accidental damage to property (not being property of or belonging to or in the custody or under the control of the insured or any person in the services of the insured or upon which the insured or any such person is or has been working if that damage results directly from such work) happening during the period of insurance specified in the schedule in connection with the Trade/Business as described in the schedule.
(i) At any insureds premises specified in the schedule
(ii) At any registered address of the customers only whilst being installed; by the insured and or his employees.
(iii)Whilst the Gas cylinders are being carried by the insured and/or his employees.
(Emphasis Supplied ) The maximum amount payable by the Company as compensation including litigation expenses in respect of any one claim or series of claims arising from one accident/event and for all accidents events during any one period of insurance shall not exceed Rs.10,000/- (it should have been Rs.10,00,000/-?) (Rupees TEN Lacs only).
Xxx xxx xxx xxx xxx OP No.4 had contested the claim of the complainants on one side and at the same time denied its liability based on clause (b) (ii) supra, before the District Forum below and thus prayed for being absolved.
6. There was no deficiency of service and/or manufacturing defect in the gas cylinder in this case, as such stand to the contrary set out in the complaint was disputed by the OPs 1 to 3.
This is the pith and substance of their reply to the complaint.
7. As per averments made in the complaint, complainant No.1 was the registered consumer with OP No.1, at its depot at Rajgarh. He had booked gas cylinder on 15.10.2004 with the OP No.2. This was supplied on 18.10.2004. When Complainant No.2 was attaching the gas cylinder with the gas stove, there was leakage of gas at a great speed followed by a blast in her house.
As a result of it, complainant No.2, her daughter Shikha and a villager Bhagat Ram, all suffered burn injuries. Building was badly damaged and its walls were blasted, furniture, household effects etc. were burnt down. Report was also lodged with the Police. Complainant No.2 as well as other injured were taken to the hospital by the Police and were medically examined. Their Medical Certificates are there on the file.
8. Thus according to the complainants, OP No.3 being manufacturer had supplied a filled-in gas cylinder which had inherent defect through OPs 1 & 2 who had obtained Insurance policy, as such claim was made in the sum of Rs.9,00,000/- in all, (Rs.20,000/-
towards medical expenses, damage to the building Rs.8,00,000/- and damage to the property Rs.80,000/-). Interest was claimed at the rate of 18% per annum on this sum. In addition to this amount, damages for mental torture and harassment in the sum of Rs.50,000/- as well as cost of Rs.11,000/- were also claimed. Further direction was sought for that the OPs should be jointly and severally directed to ensure supply to the customers of trouble free and safe gas cylinders in future to avoid such mishaps.
9. So far OPs 1 & 2 are concerned, their stands was that the Forum had no jurisdiction to try and entertain the complaint, as the cause of action, if any, arose at Rajgarh in District Sirmour. Further preliminary objections raised by them were that both of them were not concerned with the manufacture and re-filling of the gas cylinders and OP No.2 was simply a distributing agency, complaint was bad for mis joinder of respondents. Complaint involved intricate questions of fact and law which required elaborate enquiry and Civil court could only determine those. Complainant No.1 being registered consumer having booked for the supply of gas on 15.10.2004 and same having been supplied on 18.10.2004 was not disputed.
However, it was denied that the same cylinder was installed by the complainants and/or it was in defective condition. By placing reliance on Annexure A.3 it was pleaded that the cylinder was received in sound condition and allegations of deficiency in service were denied. It was further pleaded by OPs 1 to 3 that liability if any was of OP No.4.
10. Stand of OP No.3 is very simple. According to it, complainants had no cause of action against it. At no point of time any service was provided by it to the complainants. At the same time allegations of deficiency in service, as well as unfair trade practice made by the complainants were denied.
By referring to the dealership agreement, Annexure R.3/A, it was pleaded that OP No. 1 was duty bound to get the said OP No.3 indemnified against all public risks. Because the said OP having got insurance done vide insurance policy referred to hereinabove, as such OP No.4 was liable to compensate the complainants for the amount, if any payable. Allegations regarding OP No.3 being the manufacturer of cylinders was denied, however, it was admitted that it only refills the gas cylinders at its bottling plant and after taking due care, conducts strict quality control through its original dealers. In this background a prayer was made to reject the complaint.
11. Defence of OP No.4 is very simple that admittedly cylinder in question was not being fitted when the incident took place either by the insured-OP and/or its employees. In the face of this position, as also the policy conditions subject to which it had covered the risk, liability was denied by it.
12. In rejoinder filed to the replies of the OPs, the complainants denied the facts which were contrary to the averments made in the complaint and reiterated the averments made in the complaint.
13. District Forum below has allowed the complaint by holding all the OPs jointly and severally liable directing them to indemnify the complainants in the sum of Rs.5,51,240/- as compensation towards the damage caused to the building, Rs.10,000/- towards medical expenses plus Rs.43,400/- towards loss of household effects. Interest has also been allowed on this amount at the rate of 9% per annum from the date of complaint i.e. 1.1.2005 till realization besides cost of litigation assessed at Rs.3,500/-. OPs have been directed to pay this amount within forty five days from the date of receipt of the copy of the said order.
14. Shri Behal by referring to the above extracted clause of the Insurance policy submitted that admittedly cylinder in question was not being installed either by the insured and/or its employee, therefore, there is no question of his client being liable for payment of any compensation. District Forum below fell into error according to him by holding his client liable. In the alternative he submitted that the complainants had lodged the claim in the sum of Rs.13,20,000/- for the property damage and for personal injuries to the occupants under the Section relating to Public Liability. In this behalf he referred to the preliminary survey report, Annexure R.A, dated 16.12.2004. Though he hastened to add that in the final survey report, total loss assessed by his client was in the sum of Rs.1,61,432.44 both in respect of the loss to the property as well as to the household effects. He however reiterated that this amount is also not payable in the face of the admitted position as regards the incident when there was sudden leak in the cylinder while it was being fitted by complainant No.2 and not any person authorised in terms of the above extracted clause of the policy of insurance. Regarding claim made qua injuries Shri Behl submitted that his client had not covered any such risk because amount if any payable was in case of death only under the above extracted section dealing with Public Liability of Insurance policy, Annexure R.1.
15. In the appeal filed by OPs 1 & 2 Shri Shyam, their learned Counsel submitted, that his clients are neither the manufacturers nor are refillers of the gas cylinders. They are only distributors of the gas cylinders duly filled in by OP No.3, to the consumers like complainant No.1. As such, it is the duty of OP No.3 to ensure that properly manufactured cylinders of appropriate specifications were only used while filling gas into those and thereafter those are properly corked/sealed. For latent defects if any, liability is that of OP No.3. He further argued that since against Public Liability his clients had obtained insurance cover, therefore, liability is of OP No.4.
16. All these pleas were seriously contested and resisted by Shri Peeyush Verma, learned Counsel for the complainants. According to him by shifting liability inter-se, OPs cannot be absolved. Therefore, he prayed for dismissing these appeals while upholding the impugned order.
17. Before proceeding further we may observe that so far gas having abruptly leaked, followed by a blast which caused loss of property as well as household effects, besides causing burn injuries to the persons named in the complaint is established beyond any doubt as per the material placed on record by the parties.
18. In the aforesaid background, we shall first of all deal with the submission of Shri Behl based on Public Liability clause of the Insurance Company subject to which risk was covered at the instance of OP No.1.
Admittedly cylinder had been supplied by OP No.2 on 18.10.2004. It was being fitted on 22.10.2004 not either by OP No.2 or by any of its employees.
In these circumstances, OP No.4 could not have been fastened with any liability as per above extracted policy condition. District Forum below though had taken note of this clause in para-8 of the impugned order, but then misdirected itself by holding the said OP liable. It is not the case of either OPs 1 & 2 on one side and OP No.3 on the other that cylinder in question was being fitted by employee of OP No.2 when the mishap took place. In these circumstances, submission of Shri Shyam that liability if any is that of OP No.4 is without any substance. That being the position, we are of the view that submission of Shri Behl is well founded and it needs to be upheld based on the terms and conditions of the Insurance policy Annexure R.1. Ordered accordingly.
19. So far appeal filed by OPs 1 & 2 is concerned, in our opinion, negligence if any is that of these OPs who are the distributors of OP No.3 and were distributing the gas filled cylinders to consumers like complaint No.1. Why the cylinder was not fitted by its employees, Shri Shyam had no answer save and except that normally every consumer is having a Double Barrel Connection (DBC). So when the gas in one cylinder is consumed, it is replaced by a properly filled-in cylinder and is put to use whenever the consumer needs it. This submission is being noted to be rejected. Whether a consumer like Complainant No.1 and/or his family members were ever put to notice and/or were advised as to how to fit the cylinder in case of need, there is no evidence placed on record to that effect either by OPs 1 & 2 or by OP No.3. Similarly whether the consumer like complainants were ever put to notice that they should not replace the empty cylinder with a filled one, which is to be done by the staff of OPs 1 & 2, again there is no material on record produced by them.
20. OP No.3 also cannot be exonerated of its liability by taking shelter under above extracted clause from the dealership agreement. Last paragraph of the said clause in our opinion is highly questionable on the face of it because it authorizes as well as protects the said OP in case of sale of a defective cylinder. This is nothing but putting premium on the negligence of the said OP. And in any case by entering into such type of agreement inter-se by OPs 1 to 3, they cannot put the safety and security of consumers like complainants into jeopardy. Nor the OP No.3 can be allowed to take shelter of such an agreement.
21. In case the submission based on the above extracted clause of the dealership agreement on which reliance was placed by Shri R.S. Verma is taken to its logical end, result would be disastrous. Because it would take shelter under the said clause and thereby ask for exoneration. As such, submission of Shri R.S.Verma based on the terms of agreement, Annexure R.3/A is wholly misconceived and it needs to be rejected. Ordered accordingly.
22. At the same time what were the safety checks taken in case of the filled-in cylinders, at its bottling plant where those were filled in before being sent to dealers like OPs 1 & 2 by the client of Shri R.S. Verma, there is no material on record. Though Shri Verma forcefully urged that his clients adhere to strict quality control as well as also ensure proper checks before rolling out the filled-in cylinders to the market for distribution to consumers.
23. Firstly what were these checks, there is nothing on record and secondly at the time of its being filled-in, what steps were taken for the proper sealing/corking, there is no evidence produced by OP No.3. In these circumstances, his submission that there was no defect in the sealing/corking of the filled-in gas cylinder which admittedly burst causing burn injuries to complainant No.2, her daughter and another person besides loss to the building and household effects, there is nothing on record placed by OP No.3. Consequently this plea of Shri Verma is hereby rejected.
24. And in any event what transpires between the OPs 1 & 2 and OP No.3 as supplier of LPG is of no concern of the complainants. They may settle the controversy inter-se themselves, however by their agreement like Annexure R.3/A, they cannot bind down the third parties i.e. the complainants in these appeals before us. In these circumstances, the liability to indemnify the complainants is held to be joint and several of OPs 1 to 3. Who is liable inter-se, they are free to settle this issue amongst themselves and we leave this question open. Anything said in this order is meant only for the limited purpose of adjudication of this complaint filed by the complainants against the OPs. That being the position, it is held that OPs 1 to 3 are jointly and severally liable to indemnify the complainants. Ordered accordingly.
25. Now comes the question as to what compensation the complainants are entitled to. In this behalf Shri Peeyush Verma, their learned Counsel submitted, that so far Annexure R.B, assessment report, dated 15.5.2005, prepared by the Surveyor is concerned, it is of no consequence. We accept this submission of Shri Verma for the simple reason that on what basis in para 10 thereof under the heading Assessment, amount has been worked out. How the rates have been calculated, what was the source to ascertain these rates, the report is silent on this aspect, though in the end Surveyor has added 30% cost index due to increase in labour and material on HP SSR, 1999. From where the rates were ascertained when the measurements were taken, there is nothing on record.
26. At this stage Shri Verma drew our attention to Annexure A.14, an abstract of cost prepared by one Shri B.S. Chauhan, Assistant Engineer (Retd.) who had assessed the cost of construction at Rs.5,51,240/-. This has been accepted by the District Forum below. He prayed for the same being upheld while dismissing these appeals. In these circumstances, submission of Shri Verma is accepted qua Annexure A.14, the abstract of cost as well as qua Annexure A.16 the list giving cost of household articles destroyed in the fire. Shri Verma on the basis of annexure A.17 submitted that his client is entitled for reimbursement of medical expenses incurred. This plea would have been considered but his clients are not aggrieved from the order of District Forum below.
27. We have already held that so far Insurance Company is concerned, it is not liable for payment of any amount.
At the same time OPs 1 to 3 have been held jointly and severally liable to make good the loss suffered by the complainants.
28. No other point was urged.
In view of the aforesaid discussion, Appeal No.476/2007 is allowed and as a result of it the impugned order against OP No.4, United India Insurance Co. Ltd. is quashed and set aside and the complaint only qua it is hereby dismissed. At the same time appeals filed by OPs 1 and 2 as well as by OP No.3 i.e. Appeal Nos.479/2007 and 165/2008 respectively are dismissed, and all of them are held jointly and severally liable for payment of compensation as directed by the District Forum below vide impugned order. All these appeals are disposed of accordingly.
All interim orders passed in these appeals shall stand vacated forthwith.
Office is directed to place authenticated copy of this order on the files of Appeal No.479/2007 and Appeal No.165/2008.
Learned Counsel for the parties have undertaken to collect authenticated copy of this order free of cost from the Court Secretary as per rules.
Shimla, June 22, 2009.
( Justice Arun Kumar Goel ) (Retd.) President ( Saroj Sharma ) Member ( Chander Shekhar Sharma ) /BS/ Member