National Consumer Disputes Redressal
New India Assurance Co. Ltd. vs M/S Avadh Wood Products (Cold Storage) on 7 March, 2013
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 220 OF 2007 (Against the order dated 22.01.2007 in Complaint Case No. 101/98 of the U.P. State Consumer Disputes Redressal Commission, Lucknow) New India Assurance Co. Ltd. 94, M.G. Marg Lucknow Uttar Pradesh Through its Authorized Signatory Appellant Versus M/s Avadh Wood Prodcuts (Cold Storage) Azam Road, Mihinpurna Bahraich Uttar Pradesh Through its Partner Respondent BEFORE: HON'BLE MR. JUSTICE ASHOK BHAN, PRESIDENT HON'BLE MRS. VINEETA RAI, MEMBER For Appellant : Mr. Abhishek Kumar, Advocate For Respondent : Mr. Anuj Kumar, Advocate Pronounced on 7th March, 2013 ORDER
PER VINEETA RAI, MEMBER
1. This first appeal has been filed by New India Assurance Co. Ltd., Appellant herein and Opposite Party before the U.P. State Consumer Disputes Redressal Commission, Lucknow (hereinafter referred to as the State Commission) being aggrieved by the order of that Commission which allowed the complaint of M/s Avadh Wood Products (Cold Storage), Original Complainant before the State Commission and Respondent herein.
2. In his complaint before the State Commission, Respondent had stated that since 1987 they were running a cold storage as a partnership firm at Azam Road, Mihinpurna, Bahraich, U.P. for storing potatoes on behalf of customers, businessmen and farmers. Respondent had taken two insurance policies from the Appellant-Insurance Company in respect of
(i) potato stocks in the cold storage and (ii) building, plant & machinery for Rs.45 Lakh and Rs.30 Lakh respectively. The said policies covered the risks of fire, terrorist attacks and damage to potatoes packed in gunny bags as also damage to the building, plant and machinery. During the validity of the policies, due to erratic supply of electricity caused by a fire in the substation, due to which the transformer got burnt, the potatoes stored in the cold storage got damaged and despite several requests to the Executive Engineer and other Electricity Authorities, this problem was not addressed.
Alternative arrangements for generator could not materialize since the competent authority i.e. the District Supply Officer had directed all diesel and petrol pumps not to issue diesel and petrol to individuals as these were required for vehicles involved in the conduct of elections.
3. Out of 22447 bags of potatoes that were stored, 7727 bags were damaged due to non-supply of electricity consequent to the burning of the transformer. Out of the 154 customers who had stored their potato stocks in the cold storage, 50 customers filed their claim before the Licensing Authority, which passed orders against the Respondent and directed it to pay Rs.6,50,764/-. Remaining 104 claims were settled mutually and Respondent had to pay Rs.5,35,612/- to these claimants. In addition, Respondent had to pay money to the labour for clearing the cold storage and also Rs.1,50,000/- on maintenance of the building damaged by the potato stocks. Respondent, therefore, filed a claim alongwith necessary documents to the Appellant-Insurance Company, which neither responded to the same nor appointed any surveyor to assess the loss. Being aggrieved, Respondent filed a complaint before the State Commission on grounds of deficiency in service and requested that the Appellant-Insurance Company be directed to settle the insurance claim and the loss suffered by the Respondent amounting to Rs.18,45,368/- under the following heads :
a) On maintenance building Rs.1,50,000 (Rupees One lakh fifty thousand);
b) Compensation duly awarded by the licensing authority Rs.6,50,764/-
(Rupees six lacs fifty thousand seven hundred and sixty four only);
c) Amount incurred on amicable settlement Rs.5,35,612/- (Rupees five lacs thirty five thousand six hundred twelve only);
d) Amount for clearing the cold storages on labourers on Rs.60,000/- (Rupees sixty thousand only);
e) Compensation for rent charge Rs.2,88,992/- (Rupees two lacs eighty eight thousand nine hundred ninety two only);
f) Compenstion Rs.1,00,000/- (Rupees one lac only);
g) Pocket expenses incurred in prosecuting this claim Rs.10,000/- (Rupees ten thousand only);
h) Legal expenses on litigation pending before Licensing Authority and Tribunal Rs.50,000/- (Rupees fifty thousand only).
4. Appellant-Insurance Company on being served entered appearance and filed a written rejoinder denying that there was any deficiency in service. It was stated that both insurance policies covered risks only against fire and terrorist attacks and nothing else was included in the policy. Since the damage was caused on account of erratic supply of electricity and not by any fire in the cold storage or any terrorist attack, as admitted by the Respondent himself, the damage/loss was not covered as per the insurance policy and the claim was rightly not entertained.
5. The State Commission after hearing the parties and considering the evidence filed before it inter alia concluded that the insurance policy document specifying the risks covered in the policy had never been issued to the Respondent and only a cover note had been given to Respondent, which, however, did not state that only a fire which occurs in the premises will be treated as fire under the policy. The State Commission, therefore, allowed the complaint by observing as under :
It is the argument of counsel for insurance company that the insurance company is not responsible and liable for the damage consequent to fire incident in the transformer because as per insurance terms, the insurance company has no concern with the transformer got burnt in the fire. Contention of not covered by the insurance terms is not admissible. It has also been stipulated in Section 2(d) of Consumer Protection Act, 1986 that and includes any of such goods i.e. presumption of means and includes also support the fact of damage of potatoes due to fire in transformer, because stored potatoes got damaged only due to fire incident in the transformer. Fire is the only cause and reason of damage of stored potatoes. As such the insurance company is liable to pay the assured sum towards the damaged potatoes. It is also necessary to point out that it has not been mentioned in the cover note of Fire Policy that only Fire will be treated and considered as Fire under the insurance which fire incident occurs in the premises. It is also relevant to state that only cover note is available with the complainant and neither the insurance policy has been issued by the insurance company to him till date from which the complainant could know as to what are the conditions binding on him. As with regard to not issuing the insurance policy, the Honble Commission in its judgment has held the deficiency in service on the part of insurance company. Therefore, in the light of aforesaid judgment passed by the Honble National Commission in the case of Hundi Lal Jain Cold Storage, this complaint for damage of potatoes is liable to be allowed.
The State Commission, therefore, directed the Appellant-Insurance Company to pay (i) value of 2431 potato bags at the rate of Rs.280/- per quintal; (ii) value of 5296 potato bags at the rate of Rs.125/- per quintal;
(iii) take into consideration the weight of each bag as 80 kgs.;
and (iv) pay interest at the rate of 7.5% from the date of filing of the complaint i.e. 28.08.1998 till payment.
6. Being aggrieved by the order of State Commission, the present first appeal has been filed.
7. Learned counsel for both parties made oral submissions essentially reiterating the facts as stated in their respective complaints/rejoinder. Counsel for the Appellant-Insurance Company while admitting that only the cover note of the insurance policy was made available to the Respondent, which did not include the various terms and conditions of the policy, stated that the cover note clearly specified that it was a fire policy and since the damage to the potato stocks was not caused as a result of a fire in the cold storage but due to erratic supply of electricity, the claim was rightly not entertained.
8. Counsel for the Respondent on the other hand stated that the State Commission had rightly concluded that in the absence of the policy document, Appellant-Insurance Company could not bind down the Respondent to the terms and conditions of the policy. The insurance policy for which the Respondent had sought insurance cover pertained to fire, terrorist attacks and damages caused to stocks as well as building.
Admittedly, because of a fire in the substation resulting in erratic supply of electricity, there was damage to the potato stocks for which Respondent had to pay the customers on whose behalf these had been stocked and also incurred expenditure pertaining to the maintenance of the building, labour charges etc. The State Commission after carefully considering these facts had, therefore, rightly concluded that there was deficiency in service on the part of Appellant-Insurance Company in not entertaining the claim.
9. We have heard learned Counsel for both parties and also gone through the evidence on record. The fact that Respondent had taken two insurance policies to cover (i) potato stocks and
(ii) building & machinery respectively are not in dispute. It is also an admitted fact that Appellant-Insurance Company issued only the cover note to the Respondent and the insurance policy specifying the detailed terms and conditions was not made available to the Respondent. This itself is a deficiency in service on the part of Appellant-Insurance Company. Further, since the cover note does not specify the actual terms and conditions governing the policy, we agree with the State Commission that the Appellant-Insurance Company could not have bound down the Respondent to provisions of the policy of which he was not made aware. The National Commission has taken a similar view in the case of Oriental Insurance Co. Ltd. v. Brahmdeo Panjiyara decided on 14th of March, 2012, which is also relevant to this case.
We, therefore, agree with the finding of the State Commission in this connection that the Appellant-Insurance Company was guilty of deficiency in service in not settling the Respondents insurance claim
10. In view of these facts and following our judgment in Brahmdeo Panjiyara (supra), we uphold the order of the State Commission and dismiss the present first appeal. Appellant-Insurance Company is directed to settle the insurance claim of the Respondent as ordered by the State Commission within a period of three months from the date of this order.
Sd/-
(ASHOK BHAN, J.) PRESIDENT Sd/-
(VINEETA RAI) MEMBER Mukesh