National Consumer Disputes Redressal
M/S. Madhudhar Petrochem vs Oriental Insurance Co. Ltd. on 19 March, 2019
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 106 OF 2016 (Against the Order dated 18/12/2015 in Complaint No. 30/2015 of the State Commission Maharashtra) 1. M/S. MADHUDHAR PETROCHEM THROUGH ITS SOLE PROPRIETOR, MR. DHIRENDRA JAIN, 104, SHRADDHANAND, 272, 274, SAMUEL STREET, VADGADI, MUMBAI-400003 MAHARASHTRA ...........Appellant(s) Versus 1. ORIENTAL INSURANCE CO. LTD. ORIENTAL HOUSE, 4TH FLOOR, 7, J. TATA ROAD, CHURCHGATE, MUMBAI-4000020 MAHARASHTRA ...........Respondent(s)
BEFORE: HON'BLE MR. PREM NARAIN,PRESIDING MEMBER
For the Appellant : Mr. Sukumar Pattjoshi, Sr. Advocate
With Mr. Uday B. Wavikar and
Mr. Vikas Nautiyal, Advocates For the Respondent : Mr. Kishore Rawat, Advocate
Dated : 19 Mar 2019 ORDER
This appeal has been filed by the appellant M/s. Madhudhar Petrochem against the order dated 18.12.2015 of the State Consumer Disputes Redressal Commission, Maharashtra, (in short 'the State Commission') passed in Consumer Complaint No.RBT/CC/15/30.
2. The brief facts leading to the present appeal are that the appellant took the insurance policy to protect his business and the policy was valid from 16/04/2009 to 15/04/2010. A fire broke out on 25.03.2010 in the insured premises which was controlled with the help of fire tenders. The claim was lodged by the appellant. The Insurance Company appointed a surveyor who submitted his report on 30/03/2010. As no decision was communicated to the appellant the appellant filed a consumer complaint before the State Commission with the following prayers:-
(a). That the opp. Party No.2 may be directed by an order of the Hon'ble Commission to produce fire report in respect of fire which took place on 25-03-10 at plot No.80, New Chemical Zone MIDC Taloja Dist. Raigad.
(b). That the Opposite party No.1 be directed by the Hon'ble Commission to pay to the complainant a sum of Rs.57,50,000/- being the loss as claimed by complainant.
(c) Pass an order directing the opposite party No.1 to pay Compensatory interest on Rs.50,00,000.00 at a rate of 18% from 01-10-11 till realisation.
(d) Pass an order directing the Opposite party to pay cost incurred in filing and conducting of the complaint.
(d) Pass any other or direction that this Commission may deem fit to be passed in this complaint."
3. The State Commission dismissed the complaint in limine vide its order dated 02.12.2011. The appellant filed another complaint No.CC13/539 before the State Commission and the same was also dismissed by the State Commission vide its order dated 13.01.2014 on the ground that the second complaint was not maintainable for the same cause of action and between the same parties. The appellant preferred an appeal bearing No.114 of 2014 before this Commission and the order dated 13.1.2014 of the State Commission was set aside by this Commission vide its order dated 11.12.2014 and the matter was remanded to the State Commission for deciding the complaint on merits. However, the respondent opposite party was also given liberty to raise the objection with respect to the maintainability of the complaint. The State Commission vide its order dated 18.12.2015 has again dismissed the complaint on the ground of maintainability and it has been held that the second complaint was not maintainable on the same cause of action and between the same parties.
4. Hence the present appeal.
5. Heard the learned counsel for the parties and perused the record. The learned counsel for the appellant stated that there is no bar in the Consumer Protection Act, 1986 for a person to file the second complaint if a different cause of action has arisen. It was argued that in the present case when the first complaint was filed there was no decision by the Insurance Company and there was no fire certificate issued by MIDC (Fire Brigade) Taloga, Mumbai who was made opposite party No.2. The present complaint has been filed after receiving the proper rejection of claim by the Insurance Company vide the letter dated 18.04.2013. Thus, the cause of action for filing the complaint is different in the present complaint case as compared to the cause of action for filing the first complaint. Though the Insurance Company is now stating that the repudiation letter was first sent on 20.09.2011 and second repudiation letter dated 18.04.2013 is the decision on the representation filed before the Grievance Committee. It was submitted that in the first repudiation letter dated 20.09.2011, it was clearly mentioned that the complainant was required to submit fire certificate as well as some other details and therefore, that letter cannot be taken as the final repudiation letter because the Insurance Company had asked for certain information from the complainant and the matter was under correspondence between the parties. In fact, lot of communications have been exchanged between the parties and all the explanations asked for by the Insurance Company were submitted to the Insurance Company. The major objection of the Insurance Company was that the policy was taken only for trading business whereas in the insured premises some manufacturing was also started during the currency of the policy without informing the Insurance Company. It was stated by the learned counsel that due clarification was provided to the Insurance Company by stating that the insured has paid the premium at the maximum rate which was for storage and the premium for manufacturing was lesser than this premium and therefore risk for the Insurance Company was not more than in the original policy.
6. Coming again to the question of second complaint, the learned counsel for the appellant argued that there was no repudiation before the first complaint was filed by the complainant and the matter was dismissed in limine and no notice was issued to the opposite parties. Thus, not only the second complaint was not filed on the same cause of action, no version of the opposite party came on record. In this regard, the learned counsel referred to the judgment of Hon'ble Supreme Court in the matter of New India Assurance Co. Ltd. Vs R. Srinivasan, 2000 (1) SCR 1228.
7. Learned counsel for the appellant further relied on the following judgments:
"(i) M/s. Abee Associates vs. Paradise Heights CHS Ltd. & Anr., RP No.4850 of 2013, decided on 10.3.2015 (NC).
(ii) Rajeev Hitendra Pathak & Ors. Vs. Achyut Kashinath Karekar & Anr., Civil Appeal No.4307 of 2007, decided on 19.08.2011 (SC)
(iii) M/s. Galada Power and Telecommunication Ltd. Vs. United India Insurance Co. Ltd. & Anr. Etc., Civil appeal No.8884-8900 of 2010, decided on 28.07.2016 (SC)"
8. On the other hand, the learned counsel for the respondent opposite party stated that the second complaint filed by the complainant is bad by the principle of res judicata as the first complaint was also filed on the same cause of action and between the same parties. The cause of action in both the complaint cases is the non-approval of the Insurance claim by the Insurance Company. The State Commission has dismissed the first complaint on merits and the same was not dismissed in default. Therefore, the judgment of New India Assurance Co. Ltd. Vs R. Srinivasan (supra) is not applicable in the present case because in that case second complaint was allowed because the first complaint was dismissed in default and there was no proper adjudication of dispute between the parties whereas in the present case the State Commission has dismissed the complaint of the complainant by giving a finding that claim of insurance was not payable by the Insurance Company.
9. On merits, the learned counsel stated that the status of risk was changed during the currency of the policy and therefore, as per condition No.3(a) of the policy, the claim was not payable. There are other reasons for repudiation of the claim which are given in the repudiation letter.
10. I have given a thoughtful consideration to the arguments advanced by the learned counsel for both the parties and have examined the material on record. Clearly, the first complaint was filed alleging that the opposite party No.1, i.e. the Insurance Company did not take any decision on the Insurance claim submitted by the complainant and opposite party No.2 did not supply the fire certificate to the complainant. The first repudiation letter dated 20.09.2011 reads as under:-
"kindly refer to the claim lodged by you under policy no.124500/11/2010/94 vide your loss intimation letter dtd. 26/3/2010.
On close scrutiny of the papers submitted by you in support of your claim, we regret to inform you that your claim is not tenable on the following grounds:-
1. The policy was initially issued to cover hazardous stocks lying in three premises.--
a. M/s. Deepa Warehouse, Gala no.2 Mayashree compound, Opp., Priti Petrol Pump, Thane.
b. Shri Baba Rang Rasayan, Plot no.H-16, MIDC, Taloja, Dist. Raigarh.
c. Shree Pooshphans Chemical, Plot n.W/186-D, MIDC, Taloja, Raigarh.
Subsequently, there was a request for amendment of the policy to cover storage in the godown at:
a. Gupta Warehousing company, Plot no. D 10/1, Behind Every Ready Co, MIDC Turbhe, Navi Mumbai b. Marudhar Petrochem, Plot no.80, New Chemical zone, MiDC, Taloja, Raigarh.
First, it is an general provision under the policy covering godowns that only operations such as packing/selecting/assorting/mending/stitching/battery charging and like is allowed. On scrutiny of the papers it is found that there was a process activity going on in the premises. In fact such activity creates loss or inflammable vapour in your type of goods which can cause major fire hazard. The description of the incident goes very much to prove that a loss of such magnitude can happen only because of the presence of the inflammable vapour all around.
The competent Authority is of the opinion that the claim will not become enable in view of the above.
Secondly, we have vide our earlier letters requested you to submit a copy of the Fire Brigade Report which would give us an insight of the cause of loss, which has also not been submitted by you.
Thirdly, during the process of investigation we have been informed by our investigator that case has been filed by your landlord against you for causing damage to his property of which we would request you to give us the details.
However you are being given one more opportunity to substantiate your claim in view of the grounds of repudiation mentioned above before a final decision is taken at our end. Your representation/clarification must reach us within 2 weeks from the date of receipt of this letter. Please note that in case we have no response from you within 2 weeks from the date of receipt of this letter the claim shall stand repudiated for the reasons indicated above without further advices from us."
11. From the above, it is clear that doors were not shut for the insured by the Insurance Company as some more information and certain more documents were asked by the Insurance Company from the insured. Obviously the complainant started new dialogue with the Insurance Company and many letters were exchanged between them. In these circumstances, if the complainant thought of pursing with Insurance Company and not pursuing the appeal against the order of dismissal of the complaint of the complainant with a view to get his claim without any further litigation, there seems to be no deliberate inaction or negligence on the part of the complainant. Finally, when the Insurance Company rejected the claim on 18.04.2013 and his representation was also rejected by the Grievance Committee of the Insurance Company, then there was no option with the complainant but to file the consumer complaint on the basis of cause of action arising out of final repudiation letter. Thus, it is clear that the first complaint was filed when the complainant had not received any reply from the Insurance Company on the claim submitted by him to the Insurance Company whereas the second complaint has been filed when the claim has been repudiated finally by the Insurance Company. Clearly though the parties are same yet the cause of action in these complaints is not exactly the same. Moreover, the Hon'ble Supreme Court in New India Assurance Co. Ltd. Vs R. Srinivasan (supra) has clearly observed the following:-
"In the instant case, the vital fact of there being an insurance cover in favour of the respondent is not disputed. The loss suffered by the respondent is not disputed and the claim of the respondent is also not questioned. The only point urged before the State Commission as also before the National Commission and, for that matter, before us is that on account of the first complaint having been dismissed in default and the complaint having not been restored, the second complaint would not lie. The interest of justice, in our opinion, cannot be defeated by this rule of technicality. The rules of procedure. as has been laid down by this Court a number of times, are intended to serve the ends of justice and not to defeat the dispensation of justice. The respondent had suffered loss which was squarely covered by the Policy of Insurance granted by the appellant. Since his claim is not being questioned before us on merits and is being sought to be defeated on the technical plea referred to above, we are not prepared to interfere with the orders passed by the District Forum, the State Com-mission and the National Commission, particularly as it is stated before us that the whole of the claim amount has already been paid to the respondent.
Finding no merits in the contention raised by the counsel for the appellant, we dismiss the appeal but without any order as to costs."
12. From the above observation of the Hon'ble Supreme Court it is brought out that technical objections cannot be given priority over the merits of the case. In the present case complaint has been dismissed on the basis of some observations of the surveyor. Clearly all the points that have been stated in the repudiation letter were not considered by the State Commission as repudiation letter was not available before the State Commission and no notice was given to the Insurance Company which could have submitted the points of repudiation. One thing is also clear from the judgement of the Hon'ble Apex Court in New India Assurance Co. Ltd. Vs. R.Srinivasan (supra) that the Hon'ble Court has considered additionally the fact of the first complaint being dismissed in default while allowing the second complaint on the basis of the main observation that 'prohibitions' under Order 9 Rule 9 of the CPC are not applicable to the cases under the Consumer Protection Act. Hence technical point should not come in the way of dispensation of justice.
13. Based on the above discussion, the appeal is allowed and the order dated 18.12.2015 is set aside. The matter is remanded to the State Commission to restore the complaint at its original number and to decide the same on merits treating the same as maintainable. As the matter has become quite old, the State Commission is requested to dispose of the complaint on merits within a maximum period of six months.
...................... PREM NARAIN PRESIDING MEMBER