National Consumer Disputes Redressal
M/S. Ginni Filments Ltd vs New India Assurance Co. Ltd. on 12 May, 2016
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 150 OF 2003 1. M/S. GINNI FILMENTS LTD 8th FLOOR, PADMA TOWER-II, 22,RAJENDRA PLACE, NEW DELHI - 110 008. ...........Complainant(s) Versus 1. NEW INDIA ASSURANCE CO. LTD. NEW INDIA ASSURANCE BUILDING, 87, MAHATMA GANDHI RAOD-FORT, MUMBAI-400 001 2. THE NEW INDIA ASSURANCE CO. LTD. DIVISIONAL OFF. 902-905 HEMKUNT TOWER 6, RAJENDRA PLACE NEW DELHI 3. THE NEW INDIA ASSURANCE CO. LTD 902-905, HEMKUNT TOWER, 6 RAJENDRA PLACE, NEW DELHI - 110 008. ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE AJIT BHARIHOKE, PRESIDING MEMBER HON'BLE MRS. REKHA GUPTA, MEMBER
For the Complainant : Mr. Bhaskar Tiwari, Advocate For the Opp.Party : Mr. P.K. Seth, Advocate
Dated : 12 May 2016 ORDER
1.Instant complaint has been filed by the complainant company on the allegations that the complainant company purchased a fire insurance policy from the opposite party/insurance company for a total sum insured Rs.1,43,71,29,000/- on payment of premium of Rs.37,79,145/-. The policy besides other assets of the policy also insured three generator sets installed in the factory of the complainant. The insurance policy was valid for 12 months w.e.f. 26.11.1997 to 25.11.1998.
2. In the morning of 12.8.1998 one of the insured D.G. set No.6145 caught fire resulting in the damage to the D.G. set as also the turbo charger fitted in the D.G. set. Intimation of the damage to the generator set caused due to fire accident was given to the opposite party insurance company vide letter dated 13.8.1998.
3. On the receipt of intimation the opposite party appointed M/s Select Surveyors Pvt. Ltd., New Delhi to conduct the survey and assess the value of the loss caused. The surveyor visited the factory of the insured six days later on 18.8.1998. It was explained to the surveyor that the cause of fire was under investigation by the complainant company as well as the representative of the manufacturer of the D.G. set M/s Wartsila and the report shall be submitted to the insurance company and the surveyor in due course of time. The surveyor, however, vide its letter dated 3rd September, 1998 without waiting for the report regarding cause of fire, submission of claim form, etc. concluded that the loss does not fall within the purview of the fire insurance policy. The relevant observations of the surveyor are reproduced as under: -
"Kindly note that the loss reported by you does not fall within the purview of a fire policy. After examination of the set and circumstances that had led to the damage, it was inferred that the Engine of the D.G. set had suffered a breakdown. The damage, as such is not a case of fire in terms of the fire policy held by you."
4. The complainant vide its letter dated 24.9.1998 again advised the surveyor that the cause of fire was still being examined by the manufacturer M/s Wartsila. Vide said letter surveyor was intimated that the turbo charger of the D.G. set affected by the fire was sent to M/s ABB Ltd., Baroda vide delivery challan-cum-gate pass No.194 dated 12.8.1998 and it was still under repairs.
5. The surveyor vide his letter dated 26th September, 1998 addressed to the complainant stated that the equipment which has been sent for repairs should have been opened for inspection in presence of the surveyor. In reply to the surveyor's letter, complainant vide letter dated 8.10.1998 pointed out that the surveyor earlier had never advised for opening the turbo charger/diesel engine in his presence and the surveyor had pre-maturely calculated without examining the facts and the cause of fire that the claim does not fall within the purview of the insurance policy.
6. It is also the case of the complainant that the complainant company had earlier requested the insurance company to appoint a joint surveyor and that the insurance company despite of having received the request on 9th October, 1998 did not take any action.
7. The surveyor again vide his letter dated 10.12.1998 indicated that he would close the claim since he had not heard anything further from the complainant company. The complainant company vide its letter dated 6.1.1999 again informed the insurance company that M/s Wartsila had submitted its report dated 11.12.1999 about the cause of fire which was being conveyed to the surveyor alongwith complete claim papers. The complete claim papers were submitted by the complainant alongwith letter dated 9.1.1999 with a copy to the surveyor. According to the complainant the time taken in submitting the claim papers was on account of the time taken by the manufacturer and supplier to supply the spare parts and also in getting the report from M/s Wartsila. The total claim bill of the complainant company was to the tune of Rs.30,83,088/- for which complete bills and proof of payment etc. were submitted to the insurance company as also the surveyor.
8. Despite of having completed all the formalities in respect of the insurance claim the insurance company repudiated the claim. Being aggrieved of the repudiation of the claim the complainant company raised the consumer dispute by filing the instant complaint.
9. The opposite party insurance company on being served has field the written statement resisting the claim wherein it has justified the repudiation of the claim.
10. Both the parties have filed evidence on affidavit in respect of their respective allegations. We have heard learned counsel for the parties and perused the record. Condition No.8 of the insurance policy reads as under: -
"If the claim be in any respect fraudulent, or it any false declaration be made or used in support thereof or if any fraudulent means or devices are used by the insured or any one acting on his behalf to obtain any benefit under the policy or if the loss or damage be occasioned by the willful act, or with the connivance of the insured, all benefits under this policy shall be forfeited."
11. On reading of the above, it is clear that in the event of the insured making a false declaration or a fraudulent claim in any respect, all the benefits under the insurance policy shall be forfeited.
12. In the instant case from the record it is clear that the claim of the complainant so far as the loss caused to the turbo charger is concerned, is false and fraudulent because of following reasons: -
13. As per the allegations in the complaint the alleged fire incident resulting in the loss to the generator set as also the turbo charger took place in the morning of 12.8.1998 and on the same day the turbo charger was removed from the generator set and sent for repairs to M/s ABB, Baroda. It is also the case of the complainant that the intimation of the fire incident and the loss caused was given to the insurance company on 13.8.1998. There is no explanation on the record as to why the complainant company showed so much of hurry in sending the turbo charger for repairs before intimating the insurance company about the incident and waiting for the surveyor to visit and inspect the turbo charger so far as the damaged caused to the turbo charger is concerned. This circumstance casts a grave doubt on the bona-fides of the complainant.
14. In para 17 of the complainant the complainant has alleged that the turbo charger was externally inspected on 12.8.1998 itself by service Engineers from ABB Ltd., New Delhi and it was sent to the Baroda unit of M/s ABB Ltd., New Delhi on the advice of service Engineers from New Delhi after dismantling. This allegation appears to be false for the reason that neither the name of the service Engineer who allegedly visited the factory of the complainant on 12.8.1998 is given nor the affidavit of any Engineer of M/s ABB Ltd., New Delhi has been filed. On the contrary in para 3 of the survey report with the heading "About the Fire" it is recorded that during the visit of surveyor on 18.8.1998 Shri J.V. Singh, Manager Engineer (now, Chief Engineer of the insured) had given the following statement: -
"On 12.8.1998, Wednesday at 7.30 A.M. D.G. Sr. No.6145 was running in parallel with Engine No.6144 on a normal load. All of a sudden fire took place in the fuel injection system of cylinder head No.1 and due to that one nozzle got damaged and struck the Turbocharger alongwith exhaust air and engine stopped automatically. The fire was immediately controlled by DG staff present at the site and concerned persons were informed.
During detailed inspection with Wartsila Experts we found that Turbocharger and cylinder Head No.1 with its other auxiliary components were badly damaged. The quantum of loss to the set is being assessed with the help of Wartsila Engineers."
15. If the aforesaid version of Director Finance of the complainant is to be believed, then the engineer of M/s ABB Ltd. visited and inspected the damaged D.G. set and its turbo charger and on the advice of the said engineer, the turbo charger was sent to M/s ABB Ltd. Vadodara for repairs on 12.08.1998 at 8.00 p.m. The said version is not reliable as it is belied by the work report no.4004318-14 of the inspection team of Wartsila NSD Corporation, relevant portion of which is reproduced as under:
"As soon as Wartsila NSD was informed about the fire in DG#6145, Wartsila engineer visited site on 13.8.98 to investigate the reasons of fire and to carry out the necessary repairs.
INSPECTION On detailed investigation following damages were found on engine:
All gauges in instrument panel found broken.
L.O. oil sight glass on turbocharger compressor side found cracked and empty ( no oil present).
Turbocharger speed sensor had burnt out.
Turbocharger speed sensor cable had burnt out.
All pressure switches and connected cables were completely burnt.
Vent plus from fuel injection pump of unit no.6 was found missing.
All the operating parameters before breakdown were found normal from the logbook.
From the engine logbook it was found that on 7/8/98 engine # 6145 tripped due to high charge air temperature.On inspection the operator observed that charge air temperature was normal.Visual indicator signal ( alarm) on the Control Panel seems to be false.However after the said tripping engine could not be started again. The reason for non-starting of Engine was not due to high charge air temperature.However the fuel injection pumps had to be vented before restarting the engine.Venting of fuel injection pumps had to be carried out by loosening the vent screws.The same were retightened after venting on 7/8/98 and the engine commenced normal functioning.
Most likely cause of failure on 12/8/98 After examining all the factors resulting in the damages, it appears that after venting out, the vent screw of unit no.6 Fuel Pump could not have been retighten appropriately.This might have contributed to the vent screw getting loose after running for some days because of vibration & pressure pulses inside the fuel pump.The vent screw came out.The fuel leaking out of the pump caught fire.
The fire immediately thereafter spread to the instrument panel, turbocharger sight glass, turbo speed senor and cable.The pressure switches and their connected cables also caught fire.
As the sight glass of the turbocharger got cracked the oil drained.The engine the running on load but as the turbocharger compressor side oil leaked out, the turbocharger rotor might have seized.Sudden reduction in T/C rpm because of seizure of the rotor may have resulted in loud surging sound, which was heard by the operator.
Extensive damage may have happened to the T/C, hence M/s Ginni Filament is asked to call ABB turbocharger engineers for investigation & to assess damages occurred in the turbocharger.
16. On reading of the above, it appears that Turbocharger was available in the factory premises of the complainant even on 13.08.1998. Otherwise, there was no occasion for inspection team of Wartsila NSD to advice thus:
"Extensive damage may have happened to the T/C, hence M/s Ginni Filament is asked to call ABB turbocharger engineers for investigation & to assess damages occurred in the turbocharger."
17. From the above, it is clear that the version of the Director Finance of the complainant regarding dispatch of Turbocharger to the works of M/s ABB Ltd. on 12.08.1998 8.00 p.m. is false. Thus, in our view, the explanation for non production of Turbocharger before the surveyor on his visit 18.08.1998 is not acceptable particularly when there is no cogent evidence to establish that subject Turbocharger was dispatched to the works of M/s ABB Ltd before the visit of the Surveyor. Otherwise also, we fail to appreciate what was the hurry in dispatching the Turbocharger to M/s ABB Ltd. for repairs without subjecting it to the inspection of independent surveyor. From the above discussion, it is obvious that subject Turbocharger was deliberately kept away from the Surveyor on the false pretext that it has been sent to M/s ABB Ltd. Vadodara for repairs. This leads us to the conclusion that claim of the complainant so far as loss caused to the Turbocharger due to fire is false and fraudulent.
18. The falsehood of the claim of the complainant regarding having sent the turbo charger to M/s ABB Ltd., Baroda is further established by the fact that the complainant alongwith the supplementary affidavit of CW-1 Shri S. Singhvi, Director (Finance) has filed one purchase order purported to have been placed to M/s ABB Ltd. This purchase order is in respect of assessment and repair BTR 304-21 roter charges of T.C. of D.G. set wherein it is recorded that charges paid are Rs.92,610/- after deduction of TDS. Interestingly, this order is dated 3.8.1998. If the turbo charger was damaged in a fire caused on 12.8.1998, we fail to apprehend how the purchase order dated 3.8.1998 pertaining to the repair of the turbo charger was placed to M/s ABB Ltd.
19. Learned counsel for the complainant has referred to one invoice dated 12.8.1998 purported to be regarding the visit of Engineer Prabjot Singh of M/s ABB Ltd. for inspection of turbo charger on 12.8.1998. From this document learned counsel seeks us to believe that the aforesaid visit by Shri Prabjot Singh, Engineer was for inspection of turbo charger after the fire incident. This document in our considered view does not help the complainant for the reason that the complainant has failed to examine or file affidavit of Shri Prabjot Singh, Engineer to support the theory that he visited the factory of the complainant for inspection of turbo charger on 12.8.1998. Further had the version pertaining to the visit of Shri Prabjot Singh, Engineer been true, the invoice ought to have been supported by the inspection report. In absence of any inspection report we are not inclined to place any reliance on the invoice particularly in view of the purchase order dated 3.8.1998 referred to above. It is possible that Shri Prabjot Singh might have visited the factory of the complainant only to inspect that the turbo charger BTR 304-21 was functioning properly after the repairs carried out earlier by M/s ABB Ltd.
20. From the above detailed circumstances, only conclusion which can be drawn is that the claim of the complainant so far as damaged caused to turbo charger by fire is concerned, is false and fraudulent. Our aforesaid view is further strengthened from the fact that neither any FIR regarding the fire was lodged nor any fire was reported to the fire department. The explanation of the complainant in this regard is that no report to the police or fire department was made because the Engineers of the complainant company were able to extinguish the fire on their own. It is interesting to note that no Engineer of the complainant company has been examined in this regard and instead the complainant has filed affidavit of Shri S. Singhvi, Director (Finance) in support of the claim. It may be noted that the accident obviously took place in the factory premises. Thus, it can be safely inferred that Shri S. Singhvi, Director (Finance) could not have personal knowledge about the incident. Therefore, the affidavit evidence of Shri S. Singhvi, Director (Finance) of the complainant is nothing but hearsay evidence, which cannot be relied upon.
21. We may note that learned counsel for the complainant had argued that since the plea of fraudulent claim was not taken in the written statement by the opposite party, the Fora cannot go into this question. Ordinarily such an argument may hold good but in the instant case from the allegations in the complaint and the evidence produced by the complainant itself it is established that the insurance claim of the complainant so far as it is in regard to the damage caused to the turbo charger is concerned, is false and fraudulent. Thus, we do not find force in the allegation of learned counsel for the complainant.
22. In view of the discussion above, it is established that the complainant had submitted a fraudulent insurance claim at least with regard to the loss allegedly caused to the turbo charger. Therefore, in view of condition No.8 of the insurance contract, the insurance company is justified in forfeiting the insurance claim. Thus, we are of the opinion that the complainant has not been able to establish deficiency in service on the part of the opposite party. The complaint is accordingly dismissed with litigation cost of Rs.1,00,000/- payable to the insurance company.
......................J AJIT BHARIHOKE PRESIDING MEMBER ...................... REKHA GUPTA MEMBER