National Consumer Disputes Redressal
United India Insurance Company vs Yash Site Development Pvt. Ltd. on 9 May, 2019
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 1860 OF 2016 (Against the Order dated 18/01/2016 in Appeal No. 682/2014 of the State Commission Punjab) 1. UNITED INDIA INSURANCE COMPANY THROUGH ITS DELHI REGIONAL OFFICE I, AT 8TH FLOOR, KANCHENJUNGA BUILDING 18 BARAKHAMBA ROAD, NEW DELHI-110001 ...........Petitioner(s) Versus 1. YASH SITE DEVELOPMENT PVT. LTD. THROUGH YASH BOSH MITTAL, REGISTERED OFFICE AT 100/60, FT. ROAD, GURU TEGH BAHADUR NAGAR, BHATINDA PUNJAB ...........Respondent(s)
BEFORE: HON'BLE MR. PREM NARAIN,PRESIDING MEMBER
For the Petitioner : MR. ANIMESH SINHA For the Respondent : MR. GAGAN GUPTA
Dated : 09 May 2019 ORDER
PER MR PREM NARAIN, PRESIDING MEMBER
The present revision petition has been filed against the judgment dated 18.01.2016 of the Punjab State Consumer Disputes Redressal Commission, Chandigarh ('the State Commission') in First Appeal no. 682 of 2014.
2. The brief facts of the case are that the respondent/ complainant firm is a contractor specialist in telecommunication and Mr Bosh was its duly authorised director. It was alleged that the, complainant subscribed an insurance policy of the petitioner/ OP no.1 for its work order cum contract agreement allotted by the AIRTEL for work of OFC cable at 115 km from Rewari to Ateli to Bahu for Bharti Airtel Ltd. The insurance cover (no. 200405/44/08/04/40000011) was valid from 01.01.2009 to 30.09.2009. Respondent/ complainant paid premium amount of Rs.50,785/-. It was alleged that OP no.1 issued only the insurance cover but did not issue the complete policy.
3. During the work, under-ground cable of BSNL were cut and damaged on six occasions at different sites of work and a combined claim was lodged by the complainant with the opposite party insurance company. The details of the six claims are as follows:
Under ground OFC Cable cut of BSNL at 9 KM near village Ghari at Mandi Ateli Kanina and Rewari Narnal Road on 20.01.2009 amounting to Rs.1,50,000/- vide demand note no. WP - 2140/GMTD/RWR/III/90 dated 11.02.2009;
Under ground OFC Cable cut of BSNL at 10 km Mandi Ateli to Ghari, Mandi Ateli - Kanina and Rewari Narnal Road on 22.01.2009 amounting to Rs.1,50,000/- vide demand note no. WP 2140/GMTD/RWR/III/90 dated 11.02.2009;
Under ground cable cut of BSNL at Bhojwas Kanina Area on 28.01.2009 to the amounting to Rs.2,17,5000/- vide demand note no. WP 2140/GMTD/RWR/11/89 dated 11.02.2009;
Under ground OFC Cable Cut of BSNL at Danoda Mode on Rewari- Narnol Road in Mandi Ateli Kanina and Rewari Narnal Road on 02.02.2009 to the amounting to Rs.1,50,000/- vide demand note no. WP 2140/GMTD/RWR/III/90 dated 11.02.2009;
Under ground OFC cable cut of BSNL at Apna Hotel on Rewari Jhajjar Road Route Rewari Gurawara on 25.02.2009 amounting to Rs.1,50,000/- vide demand note no. WP 2140/GMTD/RWER/III/93 dated 12.03.2009.
Under ground OFC Cable cut of BSNL at Near R C Green Field at Rewari Gurawar Road on 02.03.2009 amounting to Rs.1,50,000/- vide demand note no. WP 2140/GMTD/RWR/III/93 dated 12.03.2009.
4. The insurance company appointed a surveyor who assessed the loss at Rs.9,67,500/-. The insurance company however repudiated the claim vide its letter dated 26.03.2012 wherein the reasons for repudiation are mentioned as follows:
"In the survey report Shri V P Singhal Surveyor mention that "they request BSNL official to let us know a detailed break up of Rs.1.5 lakh which they did not oblige them. They also could not provide them with any evidence along with bills and estimates and name of repairing agency which might have carried out the said job. Surveyor also wanted to know whether any contract was in force for compensation to BSNL. But you have not replied to surveyor and instead have confirmed that BSNL is repairing the cut OFC on their own as their internal circular. Also you have not provided the receipt of amount from BSNL. Also you have not given the chances to this office to verify the site at the time of loss and not provided any evidence of loss, i.e., FIR."
5. Aggrieved, by this the complainant filed a consumer complaint before the District Consumer Disputes Redressal Forum, Barnala, Punjab ('the District Forum'). The complaint was resisted by the insurance company on the grounds mentioned in the repudiation letter. It was further stated that under the policy conditions each claim was to be lodged within a period of 14 days whereas in the present case all the claims have been filed in a combined way and that too with a delay much beyond 14 days. Moreover, it was also stated that no FIR was lodged in the matter and the insurance company could not get any opportunity to inspect the site and verify the actual loss to the third party BSNL. It was requested to dismiss the complaint on these grounds. The District Forum vide its order dated 21.04.2014 dismissed the complaint.
6. Aggrieved with the order of the District Forum, the complainant preferred an appeal before the State Commission. The State Commission vide its order dated 18.01.2016 accepted the appeal of the complainant as under:
12. As a result of our above discussion, we accept the appeal of the appellant and by setting aside the order of the District Forum Barnala dated 21.04.2014, we hereby accept the complaint of the complainant and direct the OPs to release the amount of insurance to the complainant now appellant on the basis of the loss, as assessed by the surveyor and to settle the same in accordance with the report of the surveyor Shri V P Singhal and company. We also further award the amount of Rs.15,000/- as costs of litigation to complainant within 45 days from receipt of copy of this order, failing which OPs shall pay interest @ 9% per annum from the date of this order passed by this Commission till its actual payment".
7. Hence, the present revision petition.
8. Heard the learned counsel for both the parties and perused the record. Learned counsel for the petitioner has stated that as per the conditions of the policy each claim was to be notified to the insurance company within a period of 14 days and the insurance company shall be liable to indemnify the same. Learned counsel referred to the following general conditions of the policy, which read as under:
"In the event of any occurrence, which might give rise to a claim under this policy, the insured shall -
Immediately notify the company by telephone or telegram as well as in writing giving an indication as to the nature and extent of loss or damage;
Take all steps within his power to minimize the extent of the loss or damage;
Preserve the parts affected and make them available for inspection by a representative of the company or surveyor deputed by the company;
Furnish all such information and documents evidence as the company may require;
Inform the police authorities in case of loss or damage due to theft or burglary The company shall not in any case be liable for loss, damage or liability of which no notice has been received by the company within 14 days of its detection."
9. Learned counsel for the insurance company has further argued that the complainant has committed same mistake six times and has not learnt anything from the first mistake. Firstly, it was the responsibility of the complainant to have carefully done the job of laying the cable without damaging the cable already laid by other entities and secondly, if any cable of BSNL was cut at the first instance, then the complainant should have taken more precaution and avoided cutting/ damage of BSNL Cables. It seems that the complainant did not take any precaution in avoiding damage to the BSNL cable and therefore, this act would be covered under the general exclusions which reads as under:
"Wilful act or wilful negligence of the insured or of his responsible representative."
10. It was further argued by the learned counsel for the insurance company that FIR was not lodged in the matter and due to the late intimation, the insurance company or the surveyor could not verify the damage and assess the loss in the present case. The surveyor has taken into consideration the amount as claimed by the BSNL from the Airtel for the loss of their cables and the surveyor has assessed the same. The fact is that the insurance company was not aware of the cost of repairing of the damaged cables and how much money was paid for the repairing. All these details were asked by the surveyor from the complainant but no such details were supplied by the complainant. Therefore, the surveyor has not really assessed the loss correctly rather it is on the basis of the payment made by the Airtel Company to BSNL.
11. On the other hand, the learned counsel for the respondent/ complainant had stated that it would not have been possible for the complainant to repair the cable of BSNL as they have their own rules for repairing of the damaged cables. It was stated by the learned counsel for the respondent/ complainant that repairing of the cable was through their contractor. The complainant cannot go into the question of verification of payment made by Airtel to BSNL which got the work done through their contractor. The Airtel has paid this amount to BSNL and Airtel has deducted the amount from the payment due to the complainant, hence, this confirms the loss suffered by the complainant. So far as delay in filing the claim is concerned, this point was not raised in the repudiation letter and hence, the same cannot be raised afterwards. Moreover, when the bills were received from the BSNL, then only the claim could have been filed, therefore, there is no delay in filing the claim and if some delay is still attributed in filing the claim, the same may be condoned.
12. It was further argued that as per the IRDA Circular no. IRDA/HLTH/MISC/CIR/216/09/2011 dated 20.09.2011 it has clearly been laid down that if the claim is genuine it should not be rejected on the ground of delay alone. The circular reads as under:
"To : All Life Insures and non-life insurers Re : Delay in claim intimation/ documents submission with respect to (i) All life insurance contracts and (ii) all non-life individual and group insurance contracts The authority has been receiving several complaints that claims are being rejected on the ground of delayed submission of intimation and documents.
The current contractual obligation imposing the condition that the claims shall be intimated to the insurer with prescribed documents within a specific number of days is necessary for insurers for effecting various post claim activities like investigation, loss assessment, provisioning, claim settlement etc. However, this condition should not prevent settlement of genuine claims, particularly when there is delay in intimation or in submission of documents due to unavoidable circumstances.
The insurers decision to reject a claim shall be based on sound logic and valid grounds. It may be noted that such intimation clause does not work in isolation and is not absolute. One needs to see the merits and good spirit of the clause, without compromising on bad claims. Rejection of claims on purely technical grounds in a mechanical fashion will result in policy holders losing confidence in the insurance industry, giving rise to excessive litigation.
Therefore, it is advised that all insurers need to develop a sound mechanism of their own to handle such claims with utmost care and caution. It is also advised that the insurers must not repudiate such claim unless and until the reasons of delay are specifically ascertained, recorded and the insurers should satisfy themselves that the delayed claims would have otherwise been rejected even if reported in time.
The insurers are advised to incorporate additional wordings in the policy documents, suitably enunciating insurers' stand to condone delay on merit for delayed claims where the delayed is proved to be for reasons beyond the control of the insured".
13. I have given thoughtful consideration to the arguments advanced by the learned counsel for both the parties and have examined the record. The grounds mentioned in the repudiation letter seen to be untenable because, firstly, it seems to be a case of liability towards third party damage and FIR was not required to be lodged as it is not a case of theft. Moreover, FIR could have been lodged only by the BSNL. It was difficult for the complainant to get a clear answer from the BSNL about their process of repairs etc. The surveyor, vide its letter dated 29.09.2012 has clearly stated that this claim may be treated as liability towards third party damage as under:
"Hence the conditions and provisions laid out by you does not negate the insured's claim and the underwriters may pay the above claim as sub-standard accounting for delays, force majeure liability, errors and BSNL contractor profit margin, over heads etc., All the above should be taken as part of Section 2, i.e., T P Liability The section 2 states that company will indemnify the insured against legal liability for accidental loss or damage caused to property of other person for which he is responsible ......... The liability is subject to excess, expenditure which could be covered under section 1 and express admittance of the liability.
In this case specifically, liability was forced upon the insured, hence, it is reiterated that insures may settle the above claim under section 2 of the policy after considering the merits of the claim making due deductions as suggested above, policy adjustments, however, if any should be made as per previous such losses reported".
14. From the above recommendations of the surveyor it is clear that the loss of Rs.9,67,500/- was recommended, but on the clarification sought by the insurance company, the surveyor has suggested that the claim may be approved subject to various deductions as mentioned by the surveyor in his above letter. The State Commission has not considered any deductions and has allowed the total amount of loss assessed by the surveyor. The surveyor has clearly recommended that the claim may be settled under section 2 of the policy.
Section II - Liability to third parties
1. Limit of Third Party Liability any one person Rs.5,00,000/-
2. Limit of indemnity in respect of any one accident or series of accidents arising out of one event Rs.5,00,000/-
3. Total limit for section II during policy period Rs.20,00,000/-
15. Considering the above facts, first of all it is seen that the repudiation letter does not mention the delay in filing the claim. The Hon'ble Supreme Court in the case of M/s Galada Power and Telecommunication Ltd., vs United India Insurance Co. Ltd. and Anr. Etc., Civil Appeal nos. 8884-8900 of 2010 decided on July 28, 2016, has held that if a ground has not been taken in the repudiation letter the same cannot be considered at a subsequent stage by the court. The Hon'ble Apex Court has observed as under:
"12. The National Commission has relied upon Clause 5 and on that basis has rejected the claim by putting the blame on the complainant. The letter of repudiation dated 20th September, 1999, which we have reproduced hereinbefore, interestingly, does not whisper a single word with regard to delay or, in fact, does not refer at all to the duration clause. What has been stated in the letter of repudiation is that the claim lodged by the complainant does not fall under the purview of transit-loss because of the subsequent investigation report.
It is evincible, the insurer had taken cognizance of the communication made by the appellant and nominated a surveyor to verify the loss. Once the said exercise has been undertaken, we are disposed to think that the insurer could not have been allowed to take a stand that the claim is hit by the clause pertaining to duration. In the absence of any mention in the letter of repudiation and also from the conduct of the insurer in appointing a surveyor, it can safely be concluded that the insurer had waived the right which was in its favour under the duration clause.
In this regard, Mr Mukherjee, learned senior counsel appearing for the appellant has commended us to a decision of High Court of Delhi in Krishna Wanti v. Life Insurance Corporation of India[1], wherein the High Court has taken note of the fact that if the letter of repudiation did not mention an aspect, the same could not be taken as a stand when the matter is decided. We approve the said view."
16. Though the delay is an important factor in the present case, as the insurance company could not get any opportunity to inspect the damaged cable and to verify the loss, however, this delay cannot be fatal to the insurance claim of the complainant and the complainant can be put to terms for the delay in filing the claims. As this ground has not been taken in the repudiation letter therefore, the claim cannot be denied on this basis. The surveyor has recommended that the claim may be settled under Section II of the policy as liability towards third party damages, and therefore, the limits as mentioned in policy Section II are to be observed. It is clearly mentioned that the limit of third party liability to any one person is only Rs.5.00 lakh. In the present case it is only one person, i.e., BSNL that is involved and therefore, the claim can only be approved upto a maximum of Rs.5.00 lakh. Though the surveyor has recommended the insurance company that certain deductions as mentioned by the surveyor in his letter dated 29.09.2012 can be deducted but no assessment of this has been given by the surveyor or the insurance company. Hence, it is not practically possible at this stage to make these deductions from the insurance amount. However, in the facts and circumstances of the present case, I deem it appropriate not to allow any interest on the insurance amount of Rs.5.00 lakh on account of two reasons; first that the claim has been filed with huge delay and one specific condition of the policy has been breached; and secondly, certain deductions are required to be made as per the recommendation of the surveyor but the same are not being made.
17. Based on the above discussion, the present revision petition is partly allowed and the petitioner insurance company is directed to pay Rs.5.00 lakh (Rupees five lakh only) to settle the insurance claim of the complainant within a period of 45 days from the date of receipt of this order. However, if the amount is not paid within the stipulated period, the insurance company shall pay interest @ 7% per annum on this amount from the date of this order till actual payment. With these directions the order of the State Commission stands accordingly modified. Parties to bear their own costs.
...................... PREM NARAIN PRESIDING MEMBER