State Consumer Disputes Redressal Commission
Aicam Engineering Ltd., No.7, ... vs National Insurance Company Ltd., S-7, ... on 22 July, 2011
BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE : Honble Thiru Justice M.THANIKACHALAM PRESIDENT Thiru A.K. ANNAMALAI, M.A.,M.L., M.Phil MEMBER (JUDICIAL) Tmt. VASUGI RAMANAN MEMBER II F.A.NO.20/2009 (Against order in CC.NO.263/2005 on the file of the DCDRF, Chennai (South) DATED THIS THE 22nd DAY OF JULY 2011 AICAM Engineering Ltd., No.7, Arunagirinathar Street New Perungalathur Chennai- 600 063 Now having office at K. Srinivasans Building No.8-A, Jawahar Street Thirupathi Nagar Extension Kolathur, Chennai- 600 099 Appellant/ Complainant Vs. 1.
National Insurance Company Ltd., S-7, Thiru Vi ka Industrial Estate Guindy, Chennai- 32
2. State Industrial Promotion Corporation of Tamil Nadu Ltd.
19-A, Lakshmkpathy Road, Egmore, Chennai 600 008 Respondent/ Opposite parties The Appellant as complainant filed a complaint before the District Forum against the opposite parties praying for the direction to the opposite parties to pay Rs.15,38,000/- with 24% interest, alongwith compensation of Rs.350000/- and Rs.75000/- as cost. The District Forum dismissed the complaint. Against the said order, this appeal is preferred praying to set aside the order of the District Forum dt.18.11.2008 in CC.No.263/2005.
This petition coming before us for hearing finally on 8.7.2011. Upon hearing the arguments of the counsel on both sides, perusing the documents, lower court records, and the order passed by the District Forum, this commission made the following order:
Counsel for the Appellant/ Complainant: M/s. M. Selvaraj Counsel for the 1st Respondent/ 1st Opposite party: M/s. N. Vijayaraghavan Counsel for the 2nd Respondent/2nd opposite party: Mr. G. Nagarajan JUSTICE M. THANIKACHALAM, PRESIDENT
1. The complainant having failed before the District Forum, to get any relief against the opposite party, has come before this commission, for the same redressal.
2. Background of the complainants case:
The complainant company, which is engaged in the business of fabricating, erecting and commissioning, structural and mechanical components, had taken a policy, with the 1st opposite party from the year 1997, and the policy covers the places at Numaligarh, Rourkela, Mathura, Surat, Pata, Mangalore, etc., and the policies are Burglary and House Breaking Policy as well as Fire Policy. Burglary and Fire policy was taken to cover the schedule of machinery, to the value of Rs.3,60,87,000/-, and the premium paid was Rs.1,25,990/-.
3. One of the sites covered by the policies was Numaligarh Oil Refinery site in Assam, where there were three diesel welding generator sets, with water cooled diesel engine, valued at Rs.15,62,000/-. These machines are fairly large machines, usually kept in the open, while in use, in the temporary site. The 1st opposite partys representatives, wantonly introduced in the proposal, machines will be kept in first class building, at the construction site, based upon wrong information.
4. On the night between 23.10.1997 and 24.10.1997, a gang of burglars, forced their entry into the complainants site store, and carried away the three sets of diesel welding generator, after gaging and tying the security watchmen to a post, for which, upon a complaint, a case came to be registered under Sec.380 IPC. The burglary was informed to the opposite party. The police, after elaborate investigation, submitted a final report, without any clue, thereby the complainant was deprived of the insured machineries, and therefore, the opposite parties are bound to reimburse the value, as per the policy. Despite lodging the claim, supplying the materials, as and when required, the opposite party dodged the claim for 6 years, thereby they have committed deficiency, as well as negligent act, causing mental agony. Therefore the complainant is entitled to the insurance claim of RS.15,38,000/-, with interest thereon from 24.10.97, as well a sum of Rs.3,50,000/-, for damages suffered in addition to a sum of Rs.50000/-, towards expenses, with cost of Rs.25000/-. Hence the complaint.
5. The 1st opposite party admitting that the complainant had availed Burglary and House Breaking policy, for the period from 31.3.1997 to 30.3.1998, as well the claim lodged by them, for 3 welding gensets, resisted the case, interalia contending that as per the terms and conditions of the policy, the claim itself is not maintainable, since the loss not covered under the policy, was stored in the building, as described in the policy, which is not the case, that the alleged burglary or loss, did not take place from the premises described in the schedule and if any incident had occurred, it should be from open yard, and not from any constructed premises, made of concrete, and therefore as such, as per the contract of insurance, they are not liable to pay any claim, and in order in order to ascertain the nature of claim, unfortunately time had taken, which cannot be construed as deficiency in service, thereby prayed for the dismissal of the complaint.
6. The 2nd opposite party, fled written version stating, that as such no deficiency of service is attributed against them, and no claim also made against them, in the petition, and therefore they should be relieved from the botheration of the case.
7. The District Forum, by going through the affidavits filed on behalf of the parties, as well as the terms of the policy, felt that as per the terms and conditions of the policy, the denial or repudiation cannot be construed as deficiency in service, proceeded by negligent act. Therefore, the complaint was dismissed, as per the order dt.18.11.2008, which is under challenge in this appeal, on various grounds seeking relief, as prayed for.
8. The complainant/ appellant, who is engaged in the business of fabricating, erecting and commissioning structural and mechanical components, were having various type of machines, stored at various places, so as to say, throughout India. In order to secure their property viz. machineries, they have taken two policies, (1) Burglary And House Breaking Policy, (2) Fire policy. The said policies were valid from 31.3.97 to 30.9.98. One of the site covered by the policies was Numaligarh Oil Refinery site in Assam. They were having 3 diesel welding generator, transportable in wheel or otherwise, and they were available in the open yard i.e., temporary site, during the currency of the policy. It appears, on the night of 23/24.10.97, some burglars entered into the site, took away the above said three sets of diesel welding generator, resulting a complaint to the police, as usual, unable to recover the same. Thereafter, they have lodged a claim elsewhere in 1997 or 1998, but the opposite party took 6 years to repudiate the claim, as seen from Ex.A9, i.e., on 7.10.2004. Thus, there is an inordinate, unexplained delay, in not settling the claim or repudiating the claim, as rightly submitted by the learned counsel for the complainant/ appellant cannot be denied. Mere delay alone cannot be taken as deficiency in service, warranting reimbursement, and the reimbursement claimed for the burgled items, must be in terms and conditions of the policy. If the policy condition mandates the insurance company to reimburse, then the delay could be taken to decide the quantum of compensation, in addition to reimbursement, and only on the basis of the delay alone, we cannot say, as claimed by the learned counsel for the appellant, the opposite party/respondent had committed deficiency in service. In this context, we have to see the nature of policy, its terms and conditions, though the opposite party had taken so much of time, in repudiating the claim, giving hope, then and there, as if the claim is alive, likely to be settled.
9. In this case, we are concerned about the Burglary and House Breaking Policy alone, and we are not very much worried about the Fire Policy.
Admittedly, in both the policies, insured places, machineries are one and the same. Even in the complaint itself, as seen from paragraph 6 of the complaint, it is said, the opposite partys representative, who filled the proposal form, had written wantonly, that the machines will be kept in first class building, at the construction site, which is totally wrong information.
Having taken this stand, impliedly the complainant themselves have admitted that the place covered was first class building, probably concrete building, and certainly not open place or open yard, or anyother shabby construction. Therefore, it is for the complainant to make out a case, that they intended to take the policy, including the machineries kept in open yard, but it was not properly carried out by the opposite party, for which practically we have no evidence. The policies are accepted, conditions therein are accepted, thereby we have to go on the basis of the concluded contract of policy, and there could be no chance or deviation.
10. In the written version, it is said, as per the proposal, the places insured were concrete bricks and iron sheet. But the proposal(s) not produced, for which, an adverse comment was made, forgetting we are having the documents, for a concluded contract, proceeded by the proposal, and therefore, when there are terms with certainty, the non-production of the proposal forum, may not loom large, since it is to be presumed that the policies were issued, in tune with the proposal given by the insured/assured, as requested by them, being the offer, accepted by the insured.
Therefore, even in the absence of the proposals, if we are having materials to say definitely, what are all the places covered under the policy, the case can be decided with certainty.
11. Ex.A2, is the Burglary and House Breaking policy, which we are concerned. The operative clause reads, the company agrees to indemnify the insured to the extent of intrinsic value of any loss in the premises described in the schedule hereto, due to burglary or House Breaking. In the schedule, it is said various locations as per the list lodged.
Below these wordings, we find the premises was not included any yard, garden, open space or out building, not communicative with the main building, further informing that the insured place is classified as office cum factory. As per the list lodged, one of the place is Numaligarh, not in dispute. As seen from Ex.B1, Fire policy, the list attached will include, diesel welding generator sets, and water cooled diesel engine, location being Numaligarh, and the sum assured was Rs.15.62 lakhs. The property insured is well defined in Ex.A1 Fire Policy, and the same property is the subject matter of burglary policy also, wherein we find On various plants and Machinery whilst installed and or contained in the building of Class I construction occupied as Engineering workshop as per Schedule attached hereto . Thus if we read Ex.A1, B1, list attached with description of property, it is undoubtedly clear, in its true sense, Open yard or Open space, where machineries are kept, is not covered under the policy. If the parties had the intention to cover the machineries stored in the open yard also, nothing would have prevented them to say so, and instead of saying so, they said, in the building of Clause I, not only that as indicated above, they were specific that open yard is not covered. This being the position, as established by the admitted documents, for the theft or burglary had taken place, at Numaligarh, in open yard, as per the terms and conditions of the policy, the opposite party cannot be held responsible.
12. As rightly urged on behalf of the appellants, in view of the fact, the company is engaged in various developmental activities, moving from one place to another, one cannot expect, that they should store all the machineries, whether movable or attached to earth, in the clause I building viz.
concrete building. On this basis, an attempt was made to argue, that the policy should include, the machineries kept in the working site also, for which we are unable to find any documentary evidence, whereas the documentary evidence available are against the company, for the reasons recorded above.
13. In order to make out a case, that the open space also should be covered under the policy, three documents were filed before this commission, marked as Ex.A30 to A32.
14. Under Ex.A30, the complainant had informed the National Insurance Company, that their permanent location, as vandalur factory should be considered, further informing, all portable machines are situated inside the building sheds.
Based upon this, the National Insurance company replied, since the plant/machineries are moving from place to place, the rate of premium applicable for Fire policy, worksout to Rs.1,11,590/-, thereby requesting the complainant to pay the balance of Rs.39,596/-, deducting the premium already paid under Fire Policy, not under Burglary policy. Though both the policies are mentioned in Ex.A2, the amount demanded appears to have been not paid, so as to include the transit risk, that can cover, assuming the machineries stored in the open place also should come, within the meaning of transit risk, since under always moving. It is not the case of the complainant before us, that they have paid the additional premium claimed, and in this view, three gensets stored in open yard, should be covered.
15. In order to make out the reimbursement, on the basis of the burglary, there should be forceable entry, for that we do not have any material, except a FIR. FIR was lodged only under Sec.380 of IPC, not under Sec.457 read with 380 IPC. Though in the complaint, it is said that the security men were tied in the post, which is not supported by any affidavit. This being the position, a doubt arises, ordinarily, whether there should have been forceable entry, in order to attract the term burglary. Even as seen from the records, the police have not given any certificate, that the property is non-traceable, whereas it appears, it was reported to the court concerned, there was no clue, thereby making it possible to locate the property also, whether that possibility will give life or not. Thus, viewing the case from this angle also, we are unable to say that the opposite party had committed any deficiency in repudiating the claim, though it is belatedly.
16. The learned counsel for the opposite party/ respondent, drew our attention to a decision of the Apex Court in Polymat India Pvt. Ltd., Vs. National Insurance Co. Ltd., reported in IV (2004) CPJ 49 (SC), wherein more or less the same kind of policy was considered, and the property assured being factory cum godown cum office. By going through the documents therein, and the specific terms available therein also, the Apex Court, had taken the view, that an intention between the parties was, covered plant and machineries lying in factory i.e., in cover or and in shed, and not goods lying outside cover area, thereby meaning open yard. In the above judgement, the particulars given in the proposal was considered, and one of the query and answer reads Are there any goods stored in the open, or is there is Kutcha shed or timber built or thatched roof building with 15M (50ft.) or the property to which this proposal applied? If so, please give details. No . While interpreting that query, the Apex Court has ruled The answer of the insured complainant was in negative, that no goods are stored in open, or in Kutcha shed or timber built or thatched roof building within 15M (50ft.) of the property to which proposal applies. In short that goods lying outside plant are not insured. Applying these principles, if we read once again Ex.B1, which we have already pointed out supra, it is crystal clear, that the parties have never intended to cover the goods store in open area, and we repeat once again The premises shall not include any yard, garden, open space, out-building not communicating with the main building. Therefore, we are constrained to hold, that the policy does not cover, the goods stored in open place, and it covers only the property stored in Clause I building, and it does not cover the outside area of the factory cum office viz.
open yard, and the goods stored in open Yard.
The District Forum, considering the nature of the policy, though have not elaborately assigned the reasons convincingly, reached conclusion correctly, and we endorse that result, for the reasons assigned by us supra.
17. In the result, the appeal is dismissed, confirming the order of the District Forum in CC.No.263/2005 dt.18.11.2008. There will be no order as to cost throughout.
VASUGI RAMANAN A.K.ANNAMALAI M.THANIKACHALAM MEMBERII JUDICIALMEMBER PRESIDENT Additional Exhibits marked, on the side of the appellant/ complainant A30 18.04.1997 Letter of appellant to 1st respondent A31 28.04.1997 Reply of 1st respondent to appellant/ complainant A32 07.08.1997 Letter of 1st respondent to appellant/ complainant VASUGI RAMANAN A.K.ANNAMALAI M.THANIKACHALAM MEMBERII JUDICIALMEMBER PRESIDENT INDEX : YES / NO Rsh/d/mtj/Bench-1/Insurance