State Consumer Disputes Redressal Commission
Kailash Ginning & Pressing Pvt. Ltd vs The Oriental Ins. Co. Ltd on 21 December, 2020
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IN THE CONSUMER DISPUTES REDRESSAL COMMISSION ,
GUJARAT STATE AT AHMEDABAD.
Complaint No. 43 of 2014.
Kailash Ginning & Pressing Pvt. Ltd.
Survey No.53, Plot No. 5 & 6, Hadamtala Industrial Area,
National Highway 8B,
Hadamtala-360 030,
Ta: Kotda Sangani,
Dist: Rajkot
Through Director:- Dineshbhai P.Dawda Complainant
Vs.
The Oriental Insurance Company Limited
Malay Trade Centre,
Opp: Jivan Commercial Bank,
Dhebar Road,
Rajkot-360 001
...Opponents
Complainant- Learned advocate Mr. R. V. Sakaria
Opponent- Learned advocate Mr. D. B. Mehta
Coram : Justice V. P. Patel, President
Dr. J.G.Mecwan, Member
Order by Dr. J.G.Mecwan, Member
1. Short facts giving rise to the present complaint are as under: The complainant is registered private limited company registered with Registrar of the Company & engaged in cotton ginning and pressing and cotton seed manufacturing business. Mr. Dineshbhai P. Dawda is one of the Director of the company and he is authorized to file this complaint by a resolution passed by the Board of Directors of the company.
Facts of the complaint:
2. It is the submission of the complainant that complainant had obtain three Fire Insurance Policies bearing numbers [1].
2143900/11/2013/2596, [2].143900/11/2014/72 & [3]. 143900/11/2014/107 for covering his stocks of Kapas and/or in loose cotton and/or in F.P. Bales cotton Seeds Etc, and the said stocks stored/lying in Gin House and/or in Press House and or in Pala House and/or in Godown and/or in open compound situated in the same industrial complex of Kailash Ginning & Pressing Pvt. Ltd.
2.1 It is submitted that the sum insured was Rs. 10 Crore and during the subsistence of policies on date 17.04.2013 and 18.04.2013 the entire area was hit by cyclonic storm/thunder storm accompanied by heavy rain which caused heavy loss and damage to the complainant and complainant has lodged claim with the opponent and that was denied on whimsical, irrational, unjust and illogical grounds.
2.2 It is further submitted by the complainant that opponent insurance company has appointed a surveyor who has visited the site of the occurrence and collected the necessary information took photographs but he has not physically counted the damaged stock and he has not visited the four corner and sides of complainant's factory premises.
2.3 The complainant further states that after submitting all required documents in the office of the opponent as well opponent's surveyor, reminded the opponent several times for releasing the claim payment however; the opponent assured the complainant for all the time that he would receive claim payment within very short time. But on dated 30.08.2013 whereby the opponent has repudiated his liability by assigning the reason; "that the damage to stock is primary due to rain which is not covered in the policy as per terms and conditions of the policies."
2.4 It is submitted by the complainant that opponent's surveyor has assessed the loss for Rs.25,11,541/- as against the loss of 3 Rs.80,00,000/- even after submission of weather report, local news paper cutting and Gram Panchayat report.
2.5 It is further submitted by the complainant that damage due to operation of any of the peril of "Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation" is covered under the policy and loss sustained due to these perils is payable under the policy. However, the opponent has willfully repudiated the claim of complainant with sole intention of getting unjust enrichment.
2.6 It is submitted by the complainant that the act of the opponent was absolutely arbitrarily with clear cut approach of unfair practice hence, the complainant has filed present consumer complaint before State Commission under the provision of Consumer protection Act, 1986 and prayed as under:
(1) Pay the claim of amount Rs.80,00,000/-( Rupees Eighty Lakh only) to the complainant with interest annually compounded from 30.08.2013 till realization. (2) Pay Rs. 1,00,000/- to the complainant as compensation for harassment and hardship caused to the complainant. (3) Pay any such other amount as this commission is pleased to find just and proper to the complainant
3. The State Commission has admitted the complaint, notice was duly served to the opponent and Ld. advocate Mr. D. B. Mehta, has filed his appearance for the opponent.
Defense of the Opponent:
4. Opponent has filed written statement wherein, it has been mentioned that as per the provision of section 64 UM of insurance Act, a qualified surveyor was appointed and as per 4 the surveyor report and conclusion of the assessment the damage to the stocks was primarily due to rain which was not covered under the policy.
4.1 It has been further mentioned that complainant has purchased standard fire and special perils policy wherein, condition no. 6 indicates that the damage directly caused by storm, cyclone etc. are covered and therefore, when stocks was damaged due to rain claim of complainant was rejected.
Evidence produced by complainant
5. We have gone through the following documents submitted in this complaint which are on record at page no. 12 to 85.
A. Copy of proposal forms submitted by complainant for policy No.143900/11/2013/2596 B. Copy of Insurance policy no. 143900/11/2013/2596 for the period from 31.03.2013 to 29.04.2013 C. Copy of Insurance policy no. 143900/11/2014/72 for the period from 08.04.2013 to 07.05.2013 D. Copy of Insurance policy no. 143900/11/2014/107 for the period from 11.04.2013 to 10.05.2013 E. Copy of Policy terms and conditions F. Copy of Claim Form G. Copy of set of correspondence and communication through various letters exchanged between complainant, surveyor and the opponent H. Copy of stock statement, provisional Balance sheet, Balance sheet, vouchers and other account documents I. Copy of Survey Report J. Copy of Repudiation letter K. Meteorological Report and weather report issued by local authority And copy of News Paper cutting L. Copy of Reply of Complainant's RTI Application of by opponent 5
6. Evidence produced by the opponent: - NIL Arguments of the Complainant
7. Heard Ld. advocate Mr. R. V. Sakaria for the complainant and Mr. D. B. Mehta, ld. advocate for the opponent through video conference. We have gone through the evidence, documents produced by both the parties. We have perused the written statement filed by Mr. Mehta for opponent insurance company and rejoinder filed by the complainant.
7.1 Ld. advocate Mr. Sakaria for the complainant has submitted that as per policy condition the damage due to operation of any of the peril of "Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation" is covered under the policy. However, the insurance company has willfully repudiated the claim of complainant and committed deficiency of service by misinterpretation of policy conditions.
7.2 Ld. advocate Mr. Sakaria further submitted that under the head of occurrence the surveyor has observed stock of cotton seeds and bales were affected due to rain water but surveyor has ignored that such rain water was an ultimate resultant effect of the unseasonal rain followed by Cyclone and thunderstorm on two consecutive dates on 17.04.2013 & 18.04.2013.
7.3 Ld. advocate for the complainant argued out that the opponent has erred in holding that loss due to rain water is not covered under such policy and repudiated the claim as "No claim".
7.4 Ld. advocate for the complainant concluded that the opponent has repudiated his liability under standard fire and special perils policy on unjust, illogical and flimsy ground for doing unjust enrichment to their company and whereby depriving the complainant his legitimate right of recovery of his 6 damage under the said policies and thereby committed the deficiency in services.
8. ld. advocate for the complainant has submitted following judgments.
a) Judgment of The Gujarat State Consumer Redressal Disputes Commission No.255/2014 National Ins. Co. Ltd. Vs Altafali Mansurali Sumrani
b) Judgment of The Gujarat State Consumer Disputes Redressal Commission in Appeal No.253/2014 National Ins. Co. Ltd. Vs. Nazir Sadrudin kajani
c) Judgment of The Gujarat State Consumer Disputes Redressal Commission in Complaint No. No.71/2012 Sanjay Cotton vs. National Ins. Co. Ltd.
d) Judgment of The Gujarat State Consumer Disputes Redressal Commission in Complaint No. No.72/2012 Devdeep Cotton Industry Vs. National Ins. Co. Ltd.
e) Judgment of The Gujarat State Consumer Disputes Redressal Commission in Appeal No.3240/2012 National Ins.Co.Ltd. Vs. Rajal Cotton Industry
f) Judgment of The Gujarat State Consumer Dispute Redressal Commission in Appeal No.04/2013 National Ins.Co.Ltd. Vs. Jai Dwarkdhish Cotton Industries
g) Judgment of The Gujarat State Consumer Dispute Redressal Commission in Appeal No. 1923/2013 National Ins.Co.Ltd. Vs. Tirupati Cotton
h) III (2016) CPJ 565 (NC) A. R. Trading Co. vs. The Oriental Ins. Co. Ltd.
i) II (2009) CPJ 311 (NC) United India Ins. Co. Ltd. vs. Dipendu Ghosh and Anr.
j) Civil Appeal NO. 562 of 2020 Hon'ble Supreme Court of India 8.1 In the above judgment at serial No.
(a), (b), (c), (d), (e), (f), (g) and (i), it has been observed that damage was caused by rain water followed by cyclone/storm and it was covered under the policy. While In the judgment at serial no. (h), it has been observed that damage was caused by moisture on account of rainfall and it is covered under the policy. In the judgment at serial no. (j) it has been decided that in the renewal policy STFI cover was excluded and therefore, 7 complainant is not entitled to get the claim amount for the damage caused by the STFI.
Arguments of opponent.
9. Ld. advocate Mr. D. B. Mehta for opponent argued out that complainant does not fall under the definition of "consumer" as define under the Consumer Protection Act, 1986, therefore, complaint filed by the complainant is not maintainable.
9.1 Ld. advocate Mr. Mehta further submitted that on receiving intimation from the complainant the opponent has appointed qualified surveyor under the provisions of Sec. 64 UM of the Insurance Act and as per the surveyor's report and conclusion of the assessment, the damage to the stocks was primarily due to rain which was not covered under the policy as per the terms and conditions of the policy and therefore, claim was repudiated.
9.2 Ld. advocate Mr. Mehta concluded that the insurance company has acted upon the assessment report submitted by the competent surveyor appointed under the Insurance Act and hence there is no deficiency of service on the part of opponent and therefore, complaint should be rejected with exemplary costs.
Merits of the Case.
10. Considering the arguments of both the ld. advocate for the parties, perusing all the documents it appears that there is no dispute so far as the insurance policies are concerned. Copy of the insurance policies are produced on record at page 15-23. Copy of the repudiation letter dated 30.8.13 of insurance company is also produced on record at page 77 wherein it is stated that the damage caused to the stock is primarily due to rain and rain water damage is outside the scope of the policies.
811. In this case it was also contended that the complainant cannot be considered as a consumer as the complainant availed the services of the opponent for commercial purpose. This commission does not agree with the submission of the ld. advocate for the opponent. We would like to rely on the judgment of Hon'ble National Commission in the case of Harsholiya motors vs. National Ins. Co. reported in I (2005) CPJ 27 (NC) wherein, it was held by the Hon'ble National Commission that the policy is taken for the reimbursement or indemnify for loss which may be suffered due to various perils and not intended to generate profit. Hence, looking to the observation of Hon'ble National Commission, we are of the opinion that the complaint is maintainable before this Commission.
12. We have gone through all the documents produced on record, insurance policies for amount of Rs. 6 Crore, 2 Crore and 2 Crore respectively are at page no. 15-23. We have also gone through the survey report at page no. 61-76. Insurance company contended that the damage was due to direct rain water and as the same is not insured perils the claim is not payable.
12.1 Some important remarks given by surveyor in survey report are reproduce below.
a. Occurrence: Mr. Dineshbhai Devda, Director of the insured company informed us that on 17.4.13 at about 4.30 pm suddenly due to storm and again on 18.4.13 afternoon at 4.30pm, cyclonic rains & falling of ice had further damaged their stock lying in open.
b. Proximate cause of loss: Based on our discussions with the insured, our visit of the insured premises, News in the papers, we are of the opinion that rain water had damaged the stock in open of the insured in the manner stated above.
9c. News Paper cutting: Newspaper cutting are enclosed. However, weather report of Rajkot for the period is also enclosed.
d. Conclusion: From the circumstances leading to the incident, we are of the opinion that rain water had damaged the stock of the insured in the premises insured. In consideration thereof, subject to the terms and conditions of the policy, we assess the net loss payable NIL since rain water is not covered under the policy of insurance.
13. We have gone through the news paper cutting produced by complainant which are on record at page no. 82-84. Report of the Meteorological department is also produced which is on record at page 79.
13.1 In the weather report issued by Meteorological department Rajkot, it has been mentioned that on date 18.4.13 between 1900 IST to 1929 hours IST Rajkot was affected by thunder storm.
13.2 Looking to the above report it is believable that on 18.4.13 there was a thunder storm at Rajkot and its surrounding area. It is the submission of the opponent that the weather report obtained by the complainant is not pertaining to the area where factory situated. But it is well known that Meteorological department has not established observatory in each district and therefore, when distance between Rajkot and Hadamtala is just 43 Km then it is believable that Hadamtala was affected by said thunder storm which was reported in Rajkot observatory.
14. We have gone through the news paper cutting which is produce on record wherein it has been also mentioned about the storm and rain in Hadamtala area therefore, in opinion of this commission though news items published in news papers is a secondary evidence but when report of the Meteorological department support the news items and photographs published 10 in news paper then the said news items can be considered as an evidence in this complaint.
14.1 In survey report, though surveyor has noted the news paper cutting and report of the Meteorological department but that was not considered and submitted report that rain water had damaged the stock but it is also a well known phenomena and scientifically proven matter that unseasonal rain always followed by thunder storm/cyclone.
15. Hence, looking to the above facts in the opinion of this commission unseasonal rain followed by thunder storm had damaged the stock of the insured in the premises of insured and therefore, as per terms and conditions of the policy this loss destruction or damages is covered under the policy.
16. In the conclusion para (Sec. 12) of survey report it has been mentioned by surveyor that :-
"in consideration thereof, subject to the terms and condition of the policy we assess the net loss payable nil"
In the opinion of this commission duty of surveyor is to assess the loss and on that basis insurance company take decision for the payment of claim and amount of claim but in the present case surveyor has instructed insurance company not to pay claim amount and therefore that act is beyond the legal power and authority of the surveyor.
17. As per section 64 of Insurance Act surveyor was appointed by the opponent insurance company and therefore in the opinion of this commission report of the surveyor cannot be brushed aside very easily. This commission place reliance on the judgment delivered by Hon'ble National Commission III (2015) CPJ 75 (NC) wherein, Hon'ble National Commission has observed as under:
11"The surveyor had been appointed under the statutory provision of Section 64 UM (2) of the Insurance Act, 1938. In terms of section 64 UM (2) the surveyor was an independent professional engaged by the petitioner to assess the loss suffered by the respondent with respect to respondent's car/property. The report prepared by the surveyor was of a significant and evidentiary value cannot be ignored and dismissed as such by saying that the "assessed loss cannot be considered trustworthy", without giving valid reasons for coming to this conclusion."
17.1 As per the survey report there was damage to the tune of Rs. 25,11,541/- however, complainant has lodged claim amount of Rs. 80,00,000/- for the damages but on the basis of the observation made by the Apex court in the judgment cited above this commission believe that the survey report is an important document and due weightage should be given and therefore, in the opinion of this Commission by considering the assessment made by the surveyor, complainant is entitled to get Rs. 25,11,541/- as claim amount.
17.2 The claim was wrongly repudiated by the opponent so complainant is also entitled for the interest. Complainant has claimed Rs. 1,00,000/- as a compensation for mental harassment but complainant is a private limited company and therefore, complainant is not entitled for compensation towards mental harassment or any hardship.
18. In view of the aforesaid discussion, in the opinion of this Commission by repudiating the claim of complainant, opponent insurance company has shown deficiency in service and therefore, we pass following final order.
ORDER
I) The complaint is partly allowed.
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II) The Opponent Oriental Insurance company ltd. is ordered
to pay Rs. 25,11,541/- (Rupees Twenty Five Lakhs Eleven Thousand Five Hundred Forty One Only) to the complainant with interest at the rate of 9% from the date of filing of the complaint till its realization.
III) Opponent Oriental insurance company is ordered to pay Rs. 5,000/- (Rupees Five Thousand Only) to the complainant as costs of the complaint and shall bear its own costs if any.
IV) Opponent insurance company shall comply with this order within 60 days from the date of this order.
V) Copy of the judgment and order be provided to the parties free of costs.
Pronounced in the open Court today on 21st December, 2020 [Dr. J. G. Mecwan] [Mr. V. P. Patel] Member President M. B. Desai