State Consumer Disputes Redressal Commission
United India Insurance Company Ltd., ... vs M/S. S.M.S. Tele Communications And ... on 11 November, 2008
A
A.P. STATE
CONSUMER DISPUTES REDRESSAL COMMISSION
AT HYDERABAD.
F.A. 1466/2008
against C.C. 418/2007 , Dist. Forum-III, Hyderabad.
Between:
United
India Insurance Company Ltd.,
Rep.
by its Divisional Manager
Divisional
Office No. III
Basheerbagh,
Hyderabad. *** Appellant/ O.P. No. 2
And
1.
M/s. S.M.S. Tele Communications
Proprietary
concern at G-4
Happy
Homes, Palace-C
Upperpally X Road,
Mehadipatnam Ring Road
Hyderabad. ***
Rep.
by its Proprietor
R.
Mohan Raju
S/o.
R. Rama Raju
F.No.
415, Tower No. 1
Happy
Homes
Upperapally
X Roads
Rajendranagar Ring Road Respondent/
Hyderabad. *** Complainant
2.
State Bank of Travancore
Bank
Street Branch
5-1-720,
1st Floor, Kushal Chambers
Bank
Street, Hyderabad.
Rep.
by its Branch Manager. *** Respondent/
O.P.
No. 1
Counsel
for the Appellant: Mr.
G. Sundara Ramayya
Counsel
for the Respondent: Admission
Stage.
QUORUM:
HONBLE SRI JUSTICE D. APPA RAO, PRESIDENT
&
SMT. M.
SHREESHA, MEMBER
TUESDAY, THIS THE ELEVENTH DAY OF NOVEMBER TWO THOUSAND EIGHT Oral Order: (Per Honble Justice D. Appa Rao, President) ***** Having heard the learned counsel for the appellant and having perused the record, we are of the opinion that the appeal could be disposed of at the stage of admission.
This is an appeal preferred by the insurance company against the order of the Dist. Forum-III, Hyderabad directing it to pay Rs. 4,77,473/- besides compensation of Rs. 25,000/- and costs of Rs. 2,000/-.
The case of the complainant in brief is that it is a proprietary concern and provides telephone connections through EPABX system. He invested his hard earned savings and raised money from R1 bank. It obtained loan from the bank by way of hypothecation of infrastructure and covered by comprehensive insurance policy. The bank itself took a policy and was debiting the amount and directed it to pay Rs. 14,566/- on 2.8.2005. However, the policy was not issued to it. While so, on 22.5.2006 at about 11.30 a.m. there was short circuit due to which EPABX system got totally damaged beyond use. Immediately, he called the service engineers and made alternate arrangements so that customers would not be inconvenienced. He also informed to the bank, which in turn made correspondence with the appellant - insurance company by letter Dt. 24.5.2006. It also informed the matter to the police which in turn registered it as a case in crime No. 490/2006 Dt. 25.5.2006. Later it made the claim. The said claim was repudiated on the ground that it falls under head (A) general exclusions clause No. 7 under Standard Fire and Special Perils policy. The repudiation was unjust. The finding was cryptic. He took the matter with Ombudsman, however, the same was rejected, on the ground that he did not furnish documentary evidence. In fact, he sustained loss of Rs. 8,12,500/- towards loss of goods damaged and entitled to reimbursement of the policy. He is also entitled to compensation of Rs. 1 lakh towards mental agony, trauma besides Rs. 14,566/- towards insurance policy charges and Rs. 20,000/- towards costs. Therefore, it prayed for a direction for payment of the said amount.
The bank filed counter admitting sanction of loan to the complainant, and taking of an insurance policy on behalf of the complainant for the equipment hypothecated to it from the appellant insurance company. When it was informed about the loss due to short circuit, which damaged the insured goods, requested the appellant to settle the claim. There was no negligence or deficiency in service on its part and therefore prayed for dismissal of the complaint with costs.
The appellant insurance company resisted the case. It alleged that the matter cannot be decided in summary proceedings under the provisions of C.P. Act., and the complaint is liable to be dismissed in limini. While denying the various allegations against it, averred that at no time the complainant mentioned about the alleged coverage of apparatus. As per the FIR lodged by the complainant with the police on 25.5.2006 and the investigation revealed that the damage was due to lightening which was purely an accidental fire. The said report was also furnished to him. He did not file any objections to the said report. On receipt of claim, it appointed a surveyor cum investigator to investigate the claim, and assess the loss. He found that the loss to the insured equipment was due to external voltage passed through EPABX system and accessories, as a result of lightening strike, and assessed the net loss and submitted his report on 19.7.2006. Invoking clause 7 of the general exclusions, it repudiated the claim and informed the same to the complainant. The repudiation of claim does not amount to deficiency in service. The complainant did not come with clean hands, and therefore prayed for dismissal of the complaint with costs.
The complainant in proof of his case filed affidavit evidence along with Exs. A1 to A19, while the insurance company filed Exs. B1 to B5.
The Dist. Forum after considering the evidence placed on record opined that there was admitted loss to the EPABX system by lightening and that Clause 7 of the general exclusions does not apply to the instant case. The surveyor appointed by the appellant in his investigation report Ex. B2 Dt. 19.7.2006 assessed the net loss at Rs. 4,77,473/-. Therefore, it directed the insurance company as well as the bank to pay Rs. 4,77,473/- towards damage of the equipment besides Rs. 25,000/- towards compensation and Rs. 2,000/- towards costs.
Aggrieved by the said decision, the insurance company preferred this appeal contending that the Dist. Forum did not appreciate the case in correct perspective. It did not consider clause 7 of the general exclusions mentioned in the policy. The damage to the system is not covered as per the first part of above clause, since it was particular equipment affected due to lightening. Apart from it, report of the surveyor was not considered which resulted in miscarriage of justice. Therefore, it prayed that the appeal be allowed dismissing the complaint.
It is an undisputed fact that R. Mohan Raju, proprietor of complainant concern has been running the telecommunication system and set up EPABX system. It is also not in dispute that the appellant has issued Standard Fire and Special Perils Policy Ex. B5 covering the risk from 26.7.2005 to 25.7.2006. It is also not in dispute that on 25.5.2006 the telephone system, printed circuit boards, distribution boxes, modems, telephone units etc. were burnt due to lightening . The complainant lodged an FIR with Rajendranagar police under Ex. A5 Dt.
25.5.2006. He informed the same to the insurance company as well as the bank. When the said fact was informed to the insurance company it has appointed Mr. M. S. Prasad, Surveyor & Loss Assessor, (Formerly Technical person Indian Railways) to investigate into it. In his report Ex. B2 Dt. 19.7.2006 he categorically mentioned that During my enquiry with the insured and also nearby apartment people, it is learned that on 22.5.2006 there was rain with thunders and lightening. During that period, the telephones stopped working. This was also noticed by the insured exchange staff who immediately informed the situation to the proprietor and also service engineers. There were two reasons for such occurrence and damage to the insured property. They were 1) due to high electrical input power supply from Transco feeders 2) due to lightening affect.
He opined that the burn mark indications over the termination boards, circuit boards of the exchange equipment are giving strength to conclude that such damage occurred only due to high voltage entry. Such high magnitude energy shall appear only due to lightening affect. This was the appearing technical cause of burn damages to the insured EPABX equipment.
He also observed that the Rajendranagar police after their investigation concluded that the damage to the telephone equipment occurred due to electricity discharge as a result of lightening.
Finally he concluded that the cause of loss to the insured equipment was found due to external voltage passed through the EPABX and accessories as a result of lightening strike.
The exclusion clause No. 7reads as follows :
Loss destruction or damage to any electrical machine, apparatus, fixture, or fitting arising from or occasioned by over running, excessive pressure, short circuiting, arcing, self heating or leakage of electricity from whatever cause (lightening included) provided that this exclusion shall apply only to the particular electrical machine, apparatus, fixture or fitting so affected and not to other machines, apparatus, fixtures or fittings which may be destroyed or damaged by fire so set up.
(emphasis supplied) Referring to exclusion clause No. 7 of the policy, the Surveyor opined that the peril lightening caused the loss to the EPABX equipment was not covered by the insurance policy as it would come within the meaning of electronic a corollary expression of electric. Thereupon he assessed the loss at Rs. 4,77,473/-.
However he though that under clause 7 of exclusions no liability could be fastened on the insurance company.
At the out set, we may state that the word electronic which was mentioned by the insurer does not find a place in Clause-7. This word electrical/electronic was newly introduced by the surveyor. The learned counsel for the appellant contended that the exclusions clause -7 had two limbs. The first part deals with the actual property exposed to lightening. The second part deals with the adjacent or surrounding property which is likely to catch fire due to the flames or sparks arising out of the actual exposed property excluding electrical machine, apparatus, fixture or fitting affected. The EPABX system should be termed as electrical or electronic. Therefore it is not covered.
It is not known how the surveyor could say that it would apply to the EPABX system. The learned counsel for the appellant contends that it is an electronic system which also comes under the category of electrical machine. Simply because the word electronic was mentioned, it cannot be said that the system is an electric machine. We do not see any merit in the contention. It is not known wherefrom the said concept was inferred. Chambers Dictionary the word electric and electronic are defined and they are altogether different. Electric relates to electricity or the manifestation of a form of energy associated with separation or movement of charged particles, such as electrons and protons the science that deals with this, an electric charge or current. Where as the term Electronic means worked or produced by devices made according to principles of electronics concerned with or working with such devices.
It has altogether different connotations. If really electronic devices are also to be classified as electrical, it would have stated so specifically. Therefore the contention of the insurance company has no legs to stand. The Dist. Forum by elaborate reasoning opined that exclusion clause does not apply. Therefore, the repudiation of claim invoking clause 7 is not valid. The learned counsel for the appellant relied the decision in M/s. National Insurance Company Ltd., Vs. M/s. Winner Chorates Pvt. Ltd., reported in 2003 (5) ALT 29 (NC) (CPA) and contended that non-consideration of report of the Surveyor by the Fora would result in miscarriage of justice.
The Dist. Forum has considered the report of the surveyor in toto and accordingly awarded compensation only on the assessment made by the surveyor. No doubt it did not agree with the interpretation of Clause-7. Having gone through the entire record, we are of the opinion that the appellant insurance company in order to evade just claim has been dragging on the matter without settling the claim. The repudiation is unjust. The entire record would undoubtedly show that the equipment was damaged as a result of lightening. Since the EPABX system cannot be said to be an electrical machine/apparatus/fixture the repudiation was unjust. It was a machine other than electrical. The Dist. Forum has rightly appreciated the facts in correct perspective. We do not see any merits in the appeal.
In the result the appeal is dismissed. However, in the circumstances of the case no costs. Time for compliance four weeks.
PRESIDENT LADY MEBMER Dt. 11. 11. 2008.