National Consumer Disputes Redressal
National Insurance Co. Ltd. vs Richardson & Crudas Co. Ltd. on 8 June, 2018
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 545 OF 2018 (Against the Order dated 16/09/2017 in Appeal No. 719/2008 of the State Commission Maharashtra) 1. NATIONAL INSURANCE CO. LTD. Through Manager, National Legal Vertical, 2E/9, Jhandewalan Extension, New Delhi - 110 055 ...........Petitioner(s) Versus 1. RICHARDSON & CRUDAS CO. LTD. F-3, MIDC Industrial Estate, Hingna Road, Nagpur - 440 016 ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE D.K. JAIN,PRESIDENT HON'BLE MRS. M. SHREESHA,MEMBER For the Petitioner : For the Petitioner : Mr. Kishore Rawat, Advocate For the Respondent :
Dated : 08 Jun 2018 ORDER
1. This Revision Petition, under Section 21(b) of the Consumer Protection Act, 1986 (for short "the Act"), by National Insurance Co. Ltd. (for short "the Insurance Company"), the sole Opposite Party in the Complaint under the Act, is directed against the order dated 16.09.2017, passed by the Maharashtra State Consumer Disputes Redressal Commission, Circuit Bench at Nagpur (for short "the State Commission") in First Appeal No. A/08/719.
2. The said Appeal had been preferred by the Insurance Company against the order, dated 23.07.2008, passed by the Additional District Consumer Disputes Redressal Forum, Nagpur (for short "the District Forum") in Complaint Case No.35 of 2008 (CC No. 369/1997 transferred from the State Commission). By the said order, while partly allowing the Complaint, preferred by the Respondent/Complainant, a body Corporate, alleging deficiency in service on the part of the Insurance Company in not settling its claim made for indemnification of the loss suffered by it on account of theft of the electrical apparatus, like conductors etc., which was being used for erecting 400 KV electricity transmission lines from Durgapur to Jamshedpur, covering a distance of 159 Kms., the District Forum had directed the Insurance Company to pay to the Complainant a sum of ₹6,00,959/-, along with interest @ 9% p.a. from 27.10.1997 till realization, as also litigation costs, quantified at ₹2,000/-.
3. Succinctly put, the material facts, leading to the filing of the present Revision Petition, are that:
3.1 In order to have the insurance cover for the risks involved in the erection of 400 KV electricity transmission lines between Durgapur and Jamshedpur, covering a distance of approx. 160 Kms., the Complainant had taken an insurance policy from the Insurance Company, in the assured sum of ₹577.64 Lakhs, covering the sophisticated equipment, including SESR "Moose" Conductors, Insulators, Towers etc. to be used for execution of the said work. A total premium of ₹2,99,073/- was paid on the said policy. The policy, which was initially taken in the year 1988, was being renewed from time to time on the enhanced assured sum. During the subsistence of the said policy, which was valid till 07.01.1995, some unknown miscreants had stolen SESR "Moose" conductors from one of Sections of the transmission line, causing substantial loss to the Complainant. On coming to know about the said incident, on 16.09.1992, and another incident of similar kind, which was noticed on 02.10.1992, the Complainant lodged an FIR with the Police and also intimated the incidents to the Insurance Company. On receipt of the said intimation, the Insurance Company appointed a Commercial Investigation Bureau as its Surveyor to assess the loss caused to the Complainant. Vide its final report dated 12.09.1995, while assessing the loss caused to the Complainant at ₹6,00,959/-, the said Surveyor observed in its report that there was 'cessation' of work, either total or partial, which was one of the General Exclusions of the policy in question. The Insurance Company kept stoic silence for over three years of receipt of the said report and abruptly, vide letter dated 20.04.1998, repudiated the claim made by the Complainant, stating thus:-
"Without prejudice The Competent authority has repudiated the above liability of the claim because as per the attending surveyor the alleged incident of theft took place during cessation of work which is an excluded peril as per the policy issued to you."
3.2 In the aforesaid background, alleging deficiency in service on the part of the Insurance Company in not indemnifying it for the loss suffered on account of the afore-stated incidents, the Complainant filed the Complaint before the State Commission, praying for issuance of a direction to the Insurance Company to pay to it a sum of ₹6,83,349/- along with interest @ 18% p.a. as also ₹10,000/- as litigation costs. However, due to enhancement of pecuniary jurisdiction of the District Forum, vide Amendment Act 62 of 2002, w.e.f. 15.03.2003, the State Commission transferred the Complaint to the District Forum vide its order dated 01.02.2008.
4. In the said factual matrix, as noted above, on passing of the order in the Complaint by the District Forum vide its order dated 23.07.2008, issuing the aforesaid directions to the Insurance Company, and on its affirmation by the State Commission by the impugned order, the Insurance Company is before us.
5. At this stage itself, it may be noted that this is a second round of litigation before this Commission. In the earlier round, while disposing of thirteen Revision Petitions filed by the Insurance Company against equal number of orders passed by the State Commission, affirming all the orders passed by the District Forum, in identical complaints, accepting the stand of Learned Counsel for the Insurance Company, to the effect that all the grounds raised in the memo of Appeal, had not been considered by the State Commission, vide order, dated 30.08.2013, this Commission had remanded all the thirteen Appeals to the State Commission for fresh consideration, observing as follows:-
"6. Perusal of memo of appeal filed before State Commission in R.P. No. 1554 of 2013 reveals that petitioner took following grounds in memo of appeal:
C. The Learned Forum manifestly erred in not appreciating that the second report sought by the appellants was only restricted to ascertain the reasons for collapse of the structure giving rise to the claim. The Learned Forum failed to appreciate the recorded findings that the towers with FOS for 1.5 as in the case of the respondents had inherent defect and were not designed for any impact load, which may result due theft/snapping;
D. The Learned Forum manifestly erred not appreciating the documents on record and their contents. The learned Forum failed to apply its mind to the very fact that despite their being inherent defect in the towers the appellants offered to indemnify the respondents by paying an amount of Rs.03,13,796/- as per the calculations made available to the respondents as well as filed on record. The Ld. Forum also failed to appreciate that the respondent was only entitled to the said amount and that; it was the respondent, who refused the said amount. Hence, the findings recorded in the Ld. Forum and directing the appellants to pay an amount of Rs.5,50,711/- along with interest @ 9% p.a. from 05.02.2008 to the respondent is per se bad in law and is therefore required to be quashed and set aside
7. Similar ground taken in paragraph of this memo of appeal had been taken in other appeals before State Commission except change of figure of amount awarded by District Forum. In memo of appeals, no grounds have been taken regarding maintainability of the complaint, non-joinder of necessary parties and jurisdiction of the District Forum, but State Commission has dealt with all these grounds in memo of appeal which were not called for. These grounds were taken by the petitioner in written statement filed before District Forum, but learned District Forum rejected all these objections and allowed complaints and petitioner did not choose to assail order of District Forum on these grounds. In such circumstances, State Commission should not have considered all these grounds in the impugned order and should have decided appeals on the grounds mentioned in memo of appeal which have not been considered and in such circumstances, matters are to be remanded back to the State Commission for deciding appeals on the grounds taken in memo of appeal.
8. Consequently, revision petitions are allowed and impugned order dated 03.10.2012 passed by learned State Commission in Appeal Nos. A/08/591, A/08/709 to A/08/720 National Ins. Co. Ltd. Vs. M/s. Richardson & Cruddas (1997) Ltd. is set aside and appeals are remanded back to learned State Commission to confine its order only to the extent of grounds taken in memo of appeal and to consider all the grounds raised in memo of appeal." (Emphasis supplied)
6. In furtherance of the said direction, in the common impugned order, made in all the thirteen appeals, the State Commission had dealt with each of the grounds urged in the memo of Appeals. Rejecting the grounds relating to the questions whether the Complaints were barred by limitation and the District Forum's orders were contrary to law because of non-application of terms of the Insurance Contract between the parties outrightly, the State Commission has dealt with grounds 8 (c) and 8 (d) relating to the propriety in the appointment of a second Surveyor and the reasons for collapse of the structure on account of theft of the aforesaid vital parts. Still dis-satisfied, the Insurance Company has preferred this Revision Petition. The other Revision Petitions filed against the same impugned order, were dismissed in limini vide order dated 02.04.2018.
7. The sole ground on which the legality and correctness of the impugned order is questioned is that both the Forums below have failed to consider the ground on which the subject claim was repudiated. Mr. Rawat, Learned Counsel, appearing for the Insurance Company, strenuously urged that the claim was repudiated as it squarely fell under the following General Exclusive clause in the policy:-
"The Company will not indemnify the insured in respect of loss damage or liability directly or indirectly caused by or arising out of or aggravated by:-
< >< >< >< > Cessation of work whether total or partial".
8. According to the Learned Counsel, while taking a final decision to repudiate the claim on the afore-stated ground, the Insurance Company had taken into consideration the following observations by the Surveyor in para 4 of his report:
" 4. From the above, it is seen that the stringing work had been completed in the section on 08.06.1991 and further work had been held up till the date of the theft due to the afore-given reasons given by Jaya Shree Insulators. It is, therefore, seen that there was stoppage and holding up of the work after completion in this section and for which reason the small portion of the stringing work left in this line was completed and charged in Spetember'93. From this, it appears that there was cessation of work, either total or partial, which is one of the general Exclusions of the Erection All Risk Insurance Policy." (Emphasis added)
9. We may note that the issue, now sought to be pressed before us, there is no reference or discussion thereon in the impugned order, inspite of the fact that the State Commission has extracted almost all the grounds urged in the Appeals. Nevertheless, assuming for the sake of argument that such a ground was in fact raised but not dealt with, regard being had to the fact that the incident happened over two decades ago, in the year 1992, and this being the second round of litigation, we feel that it would be travesty of justice if, at this stage, the matter is once again remanded back to the Fora below for fresh adjudication on the point, more so, when the Insurance Company sat over its valuer's report for almost three years i.e. from 12.09.1995 to 20.04.1998. Accordingly, we proceed to deal with the said issue on merits.
10. The short question falling for consideration in this Revision Petition is whether "stoppage" and "holding Up" of the work at the project, on account of theft of the afore-stated parts, tantamounts to "Cessation of work, whether total or partial"; attracting the afore-extracted Exclusion Clause, as construed by the Surveyor and the Insurance Company?
11. In our opinion, the answer to the question, formulated above, need not detain us for long as it can be found in the observations by the Surveyor, reproduced and highlighted in para 8 supra. The said paragraph itself records the reason for holding up or stoppage of the work, at the site, due to the incident of theft of "Moose'' Conductors by the miscreants, when the work between a particular stretch of approx. 160 kms. long transmission line was in progress. In our view, such 'hold up' or 'stoppage' in the ongoing work does not have attributes of "cessation" as contemplated in the afore-noted Exclusion Clause. "Cessation" of work, inherently involves the element of closure of the work, which, as can be gathered from the observations of the Surveyor was not the case here. It is apparent from the said report that the solitary evidence weighing with the Insurance Company to repudiate the claim under the afore-extracted Exclusion Clause, was the aforestated observations which itself discloses the cause for temporary hold up of the said work.
12. We really wonder whether the Insurance Company, a public sector undertaking, has really made any monetary gain on the peculiar facts at hands by keeping the litigation alive for over two decades. Instead of graciously accepting a claim of approx. ₹6,00,000/-, at least in the second round of litigation, in a case, where in the first instance, for the reasons best known to it, the Insurance Company sat over the report of the Surveyor for almost three years which omission by itself is in the teeth of Regulation 9 of the Insurance Regulatory and Development Authority (Protection of Policyholders' Interest) Regulations, 2002, has still thought it advisable to continue to litigate. Most probably, the cost of litigation would be more than the amount awarded in favour of the Complainant. We say no more.
13. In view of the afore-going, we do not find any merit in the Revision Petition. The same is dismissed accordingly in limini.
......................J D.K. JAIN PRESIDENT ...................... M. SHREESHA MEMBER