National Consumer Disputes Redressal
Navjivan Roller Flour & Pulse Mills Ltd. vs National Insurance Co. Ltd. & Anr. on 9 July, 2012
NATIONAL CONSUMER DISPUTES REDERESSAL COMMISSION NEW DELHI ORIGINAL PETITION No.290 OF 1998 Navjivan Roller Flour & Pulse Mills Ltd. Registered under The Companies Act, 1956 Having Registered Office at Kumbharwada Opp. Market Yard, Dahod 389 151 .. Complainant(s) Vs. 1. National Insurance Company Ltd. Dahod Branch, 2nd Floor, Golden Market, Pani Gate, M. G. Road, Dahod 389 151 2. United India Insurance Company Ltd. Divisional Office, 2nd Floor, Kalindi Building, Jain Society, Godhra 389 001 .. opposite party (ies) BEFORE HONBLE MR. JUSTICE R. C. JAIN, PRESIDING MEMBER HONBLE MR. S. K. NAIK, MEMBER For the Complainant (s) : Mr. Mayur R. Shah, Advocate For the Opposite Party (ies) : Mr. Joy Basu, Advocate Mr. Maibam N. Singh, Advocate Mr. D. B. Patel, Sr. Branch Manager, National Insurance Company Ltd. DATED: 09th July, 2012 O R D E R
PER JUSTICE R. C. JAIN, PRESIDING MEMBER Navjinvan Roller Flour and Pulse Mils Limited, a company engaged in the business of manufacturing of various types of pulses, has filed this complaint against the opposite parties, viz. National Insurance Company Limited (opposite party no.1) and United India Insurance Company Limited (opposite party no.2) alleging deficiency in service on their part in not settling the insurance claim under two insurance policies and claiming a sum of Rs.1,37,59,677.80ps. being the amount of insurance claim along with interest @ 18% p.a. after a period of six months reasonable time for the settlement of claim till the date of realization besides a compensation of Rs.5 Lacs on account of mental torture and inconvenience suffered by the complainant.
2. In nutshell the case of the complainant is that in order to cover the risks of fire and allied perils to their Flour and Pulse Mill situated at Dahod District Godhra and the stocks of various grains and pulses stored in godowns the complainant had obtained two insurance policies through their Banker, Bank of Baroda being policies No.301302/11/97/00183/13 & 181200/11/13/16/5029/97. Policy taken from National Insurance Company Limited was in the sum of Rs.1 Crore and 80 Lacs for stocks in godown while the policy taken from opposite party no.2 United India Insurance Company Limited in the sum of Rs.2 Crore and 98 Lacs covered the risk to building, plant and machinery. The validity period of the first policy was w.e.f. 03.06.1997 to 02.06.1998 and that with the United India Insurance Company Limited was 18.04.1997 to 17.04.1998. It is alleged that during the currency of the said policies there was heavy flood on 01.08.1997 and due to entry of the flood water in the premises of the mill of the complainant, there was huge damage to the building, plant and machinery and the stocks of grains and pulses to the extent of Rs.1,37,59,677.80ps. about which the opposite parties were informed telephonically and later vide communication dated 04.08.1997 calling upon them to do the needful in the matter. However, the insurance companies failed to appoint any Surveyor to assess the loss occasioned to the complainant and instead verbally informed the complainant that the peril of flood was not covered under the insurance policies and, therefore, the insurance companies were not liable to indemnify the complainant in respect of the loss occasioned to the complainant due to the damage to their factory and stocks on account of flood. According to the complainant the stand of the insurance companies was injustified and arbitrary and amounted to deficiency in service as the complainant had asked for the coverage of peril of flood and was granted the coverage of the peril of flood also in the insurance policies. It is alleged that on the failure of the insurance companies to appoint Surveyors to assess the net loss caused to the complainant, the complainant appointed an insurance surveyor M/s Bhaskara & Co. who vide their report dated 24.01.2008 assessed the net loss at Rs.1,21,23,000/- on account of loss towards building and stocks of raw material, stocks in process and finished goods and packing material. Complainant after issuing notice, which went unheeded, filed the present complaint claiming the amounts form the insurance companies. During the pendency of the complaint, complainant amended the complaint by additionally pleading the fact about the entry of the flood water in the premises of the mill through an opening caused in the boundary wall/compound wall on account of a motor vehicle having collided against the wall causing damage to the boundary wall of the mill.
3. On being noticed opposite parties resisted the complaint by filing separate written versions to the complaint. In the written version filed on behalf of opposite party no.1 National Insurance Company Limited several preliminary objections have been raised about the maintainability of the complaint against the answering opposite party. It is stated that the complaint being without any cause of action is totally frivolous in nature and has been filed with malafide intention; the claim made by the complainant is unenforceable in law as the risk of flood is not covered under the policies in question; the policy covered the risk of fire related perils only. On merits it is not denied that opposite party no.1 had issued policy No.301302/11/97/00183/13 in the sum of Rs.1 Crore 80 Lacs along with opposite party no.2 who had issued policy in the sum of Rs.2 Crore 98 Lacs, but it is sought to be explained that both the policies covered only the fire risk and no other risk, whatsoever. Since the building and stocks of raw material, stocks in process and finished goods were allegedly damaged on account of the flood water entering into the building the complainant is not entitled to seek its indemnification from the insurance companies. It is denied that the terms and conditions of the policies are required to be read down so as to cover the risks other than the risk of fire. It is additionally pleaded that as per the complainants own version the rain water had entered into the complainants mill premises due to the adjoining GEBs wall collapse. It is denied that the complainant had taken enough precautions to meet such an eventuality. Complainants right to approach the consumer fora under the provisions of Consumer Protection Act, 1986 is also disputed. Liability to pay any amount much less the amount claimed by the complainant is specifically denied.
4. Opposite party no.2 United India Insurance Company Limited in its separate written version also raised similar preliminary objections about the maintainability of the present complaint. On merits it was admitted that the complainant was issued fire policy No. 181200/11/13/16/5029/97 through Bank of Baroda covering the risk as per the Schedule attached in the sum of Rs.2 Crore 98 Lacs for the period from 18.04.1997 to 17.04.1998. However, it is claimed that the said policy did not cover the peril of flood which peril the complainant got covered by paying the additional premium sometimes in August w.e.f. 20.08.1997 till 17.04.1998 with clear stipulation that the flood risk added in the policy will commence 15 days after the receipt of the premium. The peril of flood having taken place on 01.08.1997 i.e. several days prior to the coverage under the original policy, the risk of flood could by no stretch be covered. It is not denied that Surveyor was not appointed in this case and it is sought to be explained that it was for the simple reason that the peril of flood has not been covered under the original fire policies. Liability to pay any amount as insurance claim or compensation much less the amount claimed by the complainant in the complaint is specifically denied.
5. In the rejoinder complainant has controverted the objections and pleas raised by the opposite parties in their respective written versions and has generally reiterated the averments and allegations made in the complaint. It is maintained that the peril of flood was also covered under the policies by the opposite parties as would be evident from the recitals appearing in the cover note and the policy documents.
6. In order to substantiate their respective pleas, parties have mostly relied upon the documentary evidence viz. terms and conditions of the policy, correspondence exchanged between the parties as also the A/c Books, Balance Sheets etc. filed by the complainant and copies of certain entries of the premium and collection of premium books maintained by the opposite parties insurance companies.
That apart, parties have filed supporting affidavits. From the side of the complainant Affidavit of Indravadan Girdharlal Sheth, Managing Director of the complainant company has been filed. Opposite party no.1 National Insurance Company Limited has filed affidavit of one Mr. A. K. Gupta, Manager National Insurance Company Limited Delhi Region. From the side of opposite party no.2 affidavit of Mr. V. P. Kaul, Deputy Manager of the Regional Office Delhi has been filed.
7. We have carefully perused the entire evidence and material brought on record and have heard Mr. Mayur R. Shah, Advocate representing the complainant company, Mr. Joy Basu and Mr. Maibam M. Singh, Advocates on behalf of opposite party no.1 National Insurance Company and Mr. D. B. Patel, Senior Branch Manager on behalf of opposite party no.2 United India Insurance Company Limited and have given our thoughtful consideration to their submissions.
8. Before we advert to the merits of the complaint and the subsisting controversy between the parties, it is pertinent to note that the main plea of defence put forth by the insurance companies that the risk of flood was not covered under the policies issued by them and which were in vogue on the relevant date of the peril i.e. 01.08.1997 was considered and answered by a coordinate Bench of this Commission vide order dated 07.09.2009. Since the findings and observations made by the Commission in the said order are considered germane to the subsisting controversy, we would like to extract the same in its entirety herein below:
For adjudicating the main controversy if the risk of flood was covered by the two policies issued by National Insurance Company Ltd. opposite party no.1 and United India Insurance Company Ltd. Opposite party no.2, only few facts need be noticed. Complainant company, engaged in the business of various types of pulses purchased fire policy C No. 301302/11/97/00183/13 of Rs.1,80,00,000/- for stocks in godown in the name of Bank of Baroda A/c the complainant from opposite party No.1-insurance company Fire policy C bearing No.181200/11/13/16/5029/97 of Rs.2,98,00,000/- was purchased for building in the name of Bank of Baroda A/c the complainant. It was alleged that during the currency of these policies, on 1.8.1997 due to heavy flood damage was caused to the insured stocks and building to the tune of Rs.1,37,89,677.80ps. regarding which both he opposite parties were informed telephonically. Thereafter, letters dated 4.8.1997 were also sent. It was stated that both the opposite parties refused to depute the surveyor to find out the cause and assess the loss alleging that the risk of flood was not covered under the policies. It was claimed that flood risk was covered by the policies. Direction is sought to be issued to the opposite parties to jointly and severally pay said amount of Rs.1,37,89,677.80 /- being the amount of loss suffered with interest and to further pay amount of Rs.5 Lac as compensation towards mental agony and inconvenience.
In the written version filed by opposite party no.1 it was not disputed that stocks for a sum of Rs.1,80,00,000/- was insured vide polcy No.301302/11/97/00183/13 by the replying opposite party. Complainant had insured the building for Rs.2,90,00,000/- with opposite party no.1 insurance company. Both these policies covered only the risk of fire. Damage to the building and stocks caused due to flood was not insured.
There was, thus, no occasion for the replying opposite party for deputing a surveyor to assess the alleged loss.
In its written version the opposite party no.2 admitted to having issued Fire policy C No. 181200/11/13/16/5029/97 of Rs.2,98,00,000/- valid for the period from 18.04.1997 to 17.04.1998 in the name of Bank of Baroda A/c Navjivan Roller Flour Mills Ltd. Complainant. It was, however, alleged that the complainant took an extension of flood peril by giving additional premium. The flood risk was included in the policy subject to the express warranty that risk would commence 15 days after the receipt of the premium. Advice date shown in the policy was from 20.08.1997 till 17.04.1998. The flood loss on 1.8.1997 was not covered by the policy initially issued by the answering opposite party. Additional premium was paid on 5.8.1997. It was further alleged that the complainant had requested the Development Officer and Divisional Manger of the answering opposite party to arrange for immediate survey of the loss for its being submitted to the Income Tax Department and to the shareholders of the company. Accordingly, the Divisional Manager suggested the name of M/s Rakesh Narula & Co. Fee of the surveyor was to be paid by the complainant as per the fee schedule prescribed by the insurance company. However, the complainant did not agree to pay the fee to the said surveyor as per the schedule of the insurance company.
Copy of the policy issued by opposite party no.2 filed by the complainant is placed at page 9. Along with written version opposite party no.2 has filed the copies of the letter dated 5.8.997 sent by the complainant to opposite party no.2 and Fire acceptance advice cum receipt issued by opposite party no.2. Letter dated 5.8.1997 would show that a premium cheque of Rs.27,287/- was sent to opposite party no.2 by the complainant to cover the risk of earthquake. Fire acceptance advice cum receipt would indicate that a total amount of Rs.51,757/- was received towards premium to cover the perils of earthquate and flood and coverage of the peril of flood was to commence after 15 days from 5.8.1997.
Despite this Fire acceptance advice cum receipt report having been filed along with written version and there being mention thereof as Annexure R-3 the complainant in the rejoinder filed to written version of opposite party no.2 has not denied payment of Rs.51,757/- towards additional premium amount and receipt of said Fire acceptance advice cum receipt. Written version of opposite party no.2 is supported by the affidavit. There, thus, appears to be no reason to disbelieve opposite party no.2 insurance company that the peril of flood which was initially not included in the policy was covered after 15 days from 5.8.1997.
Since damage by flood had taken place on 1.8.1997 prior to the coverage of this risk the opposite party no.2 is not liable to pay the loss caused to the building by flood under the policy. Complaint against opposite party no.2 insurance company is, therefore, dismissed.
This brings us to the liability of opposite party no.1. Copy of the policy issued by opposite party no.1 filed along with complaint is at page 8. Order dated 19.03.2009 would show that the submission advanced by Shri Mayur R. Shah for the complainant was that within policy under the head Rate (in Rs.1000) the amount of Rs.47,340/- is shown to have been charged taking the rate at 2.10% + 25% FI. According to him, letter F of the word FI denotes Flood and the complainant was charged for the flood risk also by opposite party no.1. Also considering the submission advanced by Shri Maibam N. Singh for opposite party no.1, the opposite party no.1 was directed to disclose on affidavit as to for which risks the amount of Rs.47,340/- was charged towards premium from the complainant within three weeks. Alongwith affidavit rates of Tariff Advisory Committee for the relevant period was ordered to be filed. pursuant to this order, affidavit of A. K. Gupta, Manager has been filed by opposite party no.1. In para No.4 of the affidavit it is averred that under the head Rate (in Rs.1,000/-) the amount of Rs.47,340/- is shown to have been charged taking the rate at 2.10% + 25% FI and letter F of the word FI denotes Floater and not the Flood. Insurance company has not charged any amount for the flood risk. In the policy the name and address of the insured is shown as Bank of Baroda, Dahod branch A/c Navjivan Roller Flour & Pulse Mills Ltd., Mill No.1, near Mareket Yard, Dahod and against the column of the property insured godown is mentioned. floater policy is issued when the insured is unable to declare separate values at separate locations. Since the location of insured property is confined to the godown in Mill No.1, the charging of the rate of 25% above could not be for floater policy. Contention advanced on behalf of the complainant in regard to the insurance company having charged the premium at the said rate to cover the flood risk, therefore, has to be accepted. Sub-Section (2) of Section 64 UM of the Insurance Act, 1938 which is material, runs thus:-
No claim in respect of a loss which has occurred in India and requiring to be paid or settled in India equal to or exceeding twenty thousand rupees in value on any policy of insurance, arising or intimated to an insurer at any time after the expirty of a period of one year from the commencement of the Insurance (Amendment) Act, 1968, shall, unless otherwise directed by the (Authorioty), be admitted for payment or settled by the insurer unless he has obtained a areport, on the loss that has occurred, from a person who holds a licence issued under this Section to act as a surveyor or loss assessor (hereafter referred to as approved surveyor or loss assessor).
Provided that nothing in this sub-section shall be deemed to take awary or abridge the right of the insurer to pay or settle any claim at any amount differed from the amount assessed by the approved surveyor or loss assessor.
As pleaded in written version by opposite party no.1 and also alleged in the complaint, the opposite party no.1 had not appointed the surveyor saying that the loss arising out of flood was not covered by the policy.
provision contained in said Sub-Section (2) of Section 64 UM is mandatory. Since the amount of compensation claimed is much beyond the amount of Rs.20,000/- the opposite party No.1 insurance company is required to appoint a surveyor to assess the loss, etc. During the course of arguments it was pointed out on behalf of complainant that necessary accounts and documents to complete the survey are still available with the complainant. Opposite party insurance company is, therefore, directed to appoint a surveyor to assess the loss to the insured stocks within three weeks from today.
Complainant will make available to the surveyor the books of accounts and other documents/materials which may be needed by him and permit access to the site, to enable him to assess the loss.
Evidentiary value to be attached to the survey report of B. G. Bhatt & Co. surveyors appointed by the complainant will be considered at the time of final argument. Insurance company will ensure that the report of the surveyor to be appointed is submitted before 11.12.2009 as the present complaint pertains to the year 1998.
List on 11.12.2009 for further proceedings.
9. Aggrieved by the said order opposite party no. 1 National Insurance Company Limited filed Special Leave to Appeal (Civil) No.3032/2009 in the Supreme Court of India.
It appears that during the course of hearing, the appellant withdrew the said Special Leave Petition with liberty and the appeal was accordingly dismissed as withdrawn by the Supreme Court of India vide order dated 04.01.2010 by observing as under:
After arguing the case for some time, learned counsel for the petitioner made a request that her client may be permitted to withdraw the special leave petition at this stage with liberty to challenge the final order of the National Consumer Disputes Redressal Commission, if so advised and in that event question the legality of the appointment of the surveyor.
The request of the learned counsel is accepted and the special leave petition is dismissed as withdrawn with liberty in terms of the prayer made.
10. After the dismissal of the SLP in terms of the above order, opposite party no.1 National Insurance Company Limited in compliance with the directions given by this Commission in its order dated 07.09.2009 appointed a Surveyor in the name of J. Basheer & Associates Surveyors, Private Limited who sought certain documents and material from the complainant which, it appears, were not submitted and, therefore, the said Surveyor submitted an inconclusive report dated 16.04.2010.
11. From a perusal of the order of this Commission dated 07.09.2009 it is manifest that this Commission in no uncertain terms upheld the defence plea put forth by opposite party no.2 United India Insurance Company to the effect that the peril of the flood was not included in the original policy which was in vogue as on the date of the peril and, therefore, it was not liable to indemnify the loss occasioned to the building of the complainant by flood under the said policy and, therefore, dismissed the complaint visa-a-viz opposite party no.2.
As complainant did not challenge the said finding/order, the said order will be deemed to have attained finality.
Mr. Mayur Shah, counsel for the complainant did not dispute this factual and legal position, therefore, the scope of the present complaint is necessarily restricted to consideration of the claim against opposite party no.1 National Insurance Company Limited only.
Even for that Mr. Shah would strongly contend that the defence plea put forth by opposite party no.1 National Insurance Company Limited was also duly considered and answered by this Commission in the same very order dated 07.09.2009 by which this Commission has dismissed the complaint of the complainant against opposite party no.2.
On the other hand Mr. Joy Basu has vehemently urged that there is no clear cut finding of the Commission in regard to the main plea of the opposite party no.1 and the only concrete finding/direction given in the said order was for the appointment of a Surveyor by opposite party no.1. This has really made the task of this Commission a bit difficult. On a careful perusal of the order dated 07.09.2009 there cannot be any doubt that the defence plea put forth by both the opposite parties was considered by this Commission and while the clear cut finding was returned in regard to plea raised by the opposite party no.2 but no such clear cut finding was made in regard to the defence plea of opposite party no.1, although certain pertinent observations about the merit of the said plea were made in the ultimate paragraph of the said order. On the strength of the said observations, the complainant is perhaps within its right to contend that these observations have clinched the issue in regard to the liability of the opposite party no.1 to settle the claim under the insurance policies issued by it. However, it would appear that while making the said observations or even if one can label them as finding it cannot be said that the entire evidence and material brought on record was considered by this Commission as it would have been considered at the time of final adjudication of the matter.
Mr. Joy Basu pointed out that there is enough evidence and material brought on record which if considered would produce a different finding/result. In any case he submits that Supreme Court while permitting the opposite party no.1 to withdraw the SLP had permitted the opposite party no.1 to question the legality of the order passed by this Commission in regard to the appointment of Surveyor.
12. Mr. Mayur R. Shah, learned counsel for the complainant emphatically argued that the issue with regard to coverage of flood risk under the policy issued by opposite party no.1 National Insurance Company has already been decided by this Commission in its order dated 7.9.2009 which has been affirmed by the Honble Supreme Court vide its ordre dated 04.01.2009 thereby dismissing the appeal of the opposite party no.1 and, therefore, the said issue cannot be re-opened at this stage. In this regard, he seeks support from a decision of the Supreme Court in the case of Lily Thomas, etc. vs. union of India & ors. AIR 2000 SC 1650 where the Surpeme Court had occasion to consider the scope of review proceedings and held by observing as under:
The dictionary meaning of the word re-view the act of looking, offer something again with a view to correction or improvement. It cannot be denied that the review is the creation of a statute. The power of review cannot be exercised for correction of a mistake and not to substitute a view. Such powers can be exercised within the limits of the statute dealing with the exercise of power. The review cannot be treated as an appeal in disguise. The mere possibility of two views on the subject is not a ground for review. Once a review petition is dismissed no further petition of review can be entertained.
The rule of the law of following the practice of the binding nature of the larger Benches and not taking different views by the Benches of coordinated jurisdiction of equal strength has to be followed and practiced. However, this Court in exercise of its powers under Article 136 or article 32 of the Constitution and upon satisfaction that the earlier judgments have resulted in deprivation of fundamental rights of a citizen or rights created under any other statute, can take a different view notwithstanding the earlier judgment.
There cannot be any quarrel with the above legal proposition but the question is as to whether while considering the defence plea of opposite party no.1, this Commission can be said to be reviewing the order of the coordinate Bench? Our answer is in the negative. There is no question of review of the earlier order passed by the Commission because the matter so far as it relates to the liability of opposite party no.1 to settle the claim of the claimant cannot be said to have been finally adjudicated by this Commission.
13. Having considered the respective submissions, in particular the additional evidence led on behalf of the parties after this Commission passed the order dated 07.09.2009 and on doing so we are of the considered opinion that the observation made by this Commission in its earlier order with regard to the defence plea on behalf of the opposite party no.1 National Insurance Company Limited was tentative/inconclusive in nature and was based on a prima-facie view of the Commission. It was largely based on the consideration of the deposition made by Mr. A. K. Gupta, Manger in his affidavit filed on behalf of opposite party no.1. Although, along with the said affidavit the deponent had also filed rates of premium as fixed by the Tariff Advisory Committee but it would appear that the said rates were not duly considered by this Commission in its entirety and in depth. In our view, it would be wholly unjust to the opposite party insurance company if the said observation/finding made by this Commission in regard to the defence plea put forth by opposite party no.1 is treated conclusive and final when this matter requires further consideration based on the additional evidence and material brought on record.
14. Having said so, we must proceed to examine the plea of opposite party no.1 based on the entire evidence and material brought on record by the parties. Fate of this complaint hinges on the simple answer to a simple but crucial question i.e. whether the policy in question covered the risk of flood along with the risk of fire and related risks. Answer to it depends on the construction of the recitations made in the policy and interpretation of the terms and conditions attached to the policy document. As to what were the stipulations in the insurance policy and subject to what conditions the policy was issued requires a closure scrutiny of the fire policy C (Annexure A/8) filed by the complainant along with complaint. The recitations in the policy, although on the prescribed format, are handwritten. It is necessary to reproduce the same here:
From a careful examination of the above, it is manifest that:-
(i) It was a fire policy;
(ii) It had been taken by Bank of Baroda, Dahod Branch in the name A/c of the complainant
(iii) The policy was issued on 02.06.1997 at Dahod.
(iv) Period of insurance was 12 months i.e. from 03.06.1997 to 02.06.1998
(v) The policy was in the sum of Rs.1 Crore 80 Lacs and the risk cover was as per policy C
(vi) Policy covered the stocks of non-hazardous goods stored in the godowns at Dahod
(vii) The policy did not cover any other property like building, machinery and other contents, stocks and stocks in process, furniture and other accessories etc.
(viii) A total premium of Rs.47,221/- was charged for the coverage as per the following calculation:
Risks Covered Sum Insured Rate/Peril Code No. Rate (In Rs.1000) Premium 1,80,000/- 41 2.10% = 25% FI Rs.47340=00 Less 5% Rs.2367=00 5% sc Rs.44973=00 Rs.2248=00 Rs.47221=00
16. Calculation of premium charged would show that the basic premium charged was on two counts, i.e. premium payable basic rate @ 2.10 per Mille on Rs.1 Crore 80 Lacs to which a further sum @ 25% was added towards FI thereby making the total premium at Rs.47,340/.
From that amount, 5% was deducted towards special discount thereby making the amount of premium at Rs.44,973/- to which a sum of Rs.2248/- was added as service charge @ 5% thereby making the total paid amount at Rs.47,221/-.
17. So far as the calculation of the basic premium @ 2.10 per Mille is concerned, there is no dispute between the parties that the said premium was payable and charged for covering the fire and allied risks under fire policy C. Parties are loggerheaded in respect of the construction of the abbreviation FI, because according to the complainant the abbreviation is in fact FL and we should also read it so denoting the additional coverage of the peril of flood while according to the insurance companies this abbreviation denotes additional coverage for floater insurance. How we should resolve this controversy will depend on a host of facts and circumstances which have been pressed in service by the parties. We would like to deal with the same one by one.
18. The first and foremost factor put forward by Mr. Joy Basu in support of the defence plea that the abbreviation FI used in the table of calculation of the premium could not be for flood coverage, is that the fire policy C issued to the complainant specifically excluded the peril of flood and allied perils which are collectively known as STFI (Storm, Tempest, Typhoons, Flood, Inundation) by virtue of clause H of the exclusive clauses appearing in the policy which is to the following effect:
(h) Any loss or damage occasioned by or through or in consequence directly or indirectly of any of the following occurrences, namely
(i) ..
(ii) Typohoon, Hurricane, Tornado, Cyclone, or other atmospheric disturbance. Flood and inundation.
On the strength of the above exclusionary clauses it was contended by Mr. Basu that it was not possible for the insurance company to cover the peril of flood alone even by accepting additional premium.
He submitted that it was permissible to add on/additional coverage of STFI on collecting the additional premium prescribed to cover such a risk by making a specific endorsement in the policy to that effect.
19. That apart Mr. Basu has taken pains to point out that the additional 25% premium charged in this case over and above the basic rate of 2.10 per Mille was for issuing a floater insurance rather than for coverage of flood peril because for coverage of additional risk of STFI, rate was 0.75 per mille which will bring the amount to Rs.13,500/- which in fact was paid by the complainant on 07.08.1997 i.e. after the date of the peril. In this connection our attention has been invited to the rates notified by the tariff committee in the Tariffs Act framed by Tariff Advisory Committee, copies of which have been filed on record. From a careful perusal of the same, it is evident that two different rates of premium were prescribed for issuing a floater insurance and for covering the risk of STFI viz for issuing a floaters policy, additional premium @ 25% was prescribed and for allied perils (STFI) the prescribed rate was 0.75 per Mille. On the other hand, counsel for the complainant has made a vain attempt to read the abbreviation FI as F.L. denoting additional coverage of flood which by no stretch is logical and can be accepted as the proper abbreviation of the word Flood. Therefore, in all probabilities the letters FI denote additional coverage for floating insurance. This finds support from the fact that it is permissible to issue a floater covering stocks policy in more than one specified building or in open within the limits of one city/town/village by charging 25% loading over and pay the highest rate applicable to any one risk. According to the Tariffs, it was obligatory on the part of the insurer to charge 25% floater extra on the premium calculated by applying the basic rate of 2.10 per Mille. It is not disputed that the complainant had about 21 godowns where stocks of pulses had been stored besides some stocks were found stocked outside the godown near the processing mill sheds having no side walls. The figure of 25% floater extra appears at the floater section of the tariff which excludes the possibility of this charge being for coverage of any other risk like flood and its allied perils.
20. Yet another important factor which would belie the stand of the complainant and strengthen the plea of the insurance company is the payment of extra premium made by the complainant to the insurance company in the month of August 1997.
Opposite parties were permitted to file the extracts of the relevant registers i.e. the Premium register and the premium collection registers containing the relevant entries. The insurance company had also produced the original registers before this Commission for its perusal at the time of final hearing of the matter. Along with the said extracts affidavit of the concerned officer responsible for maintaining the said record has also been filed. From the extracts of the premium register and collection registers it is manifest that a cheque bearing no.0013651 in the sum of Rs.13,466/- was issued by the complainant and deposited with the insurance company subsequent to the date of the incident and the same is reflected in the respective entries of dated 07.08.1997 in the premium register as well as the collection register of the insurance company. According to the insurance company, the payment of this additional amount of Rs.13,466/- was towards the additional coverage of flood and allied perils (STFI) w.e.f. 07.08.1998 which is much later than the date of incident of flood. The breakup of the calculation of the above sum of Rs.13,466/- is stated to be as under:
Additional cover for STFI (Storm, Typhoon, Flood, Inundation)
(i) Basic Rate @ 0.75 per Mile of Rs.1,80,00,000 13,500
(ii) Special Discount (less 5%) (-) 675
(iii) Net Premium 12,825
(iv) Service Tax (5%) (+) 641
(v) Total Premium Collected Rs.13,466/-
(Copies of the relevant portion of Premium Register and Collection Register are enclosed and marked as Annexure-E (Colly)). (Refer to page 30-31 of this paper book).
The above statement would show that the above amount was received for coverage of the additional flood and risk w.e.f. 07.08.1997 only. The entries in the premium register are corroborated and reflected by the entry in the collection register where at entry no.70 the particulars of the insured is given along with the corresponding cheque number by which the amount of Rs.13,466/- had been paid towards additional risk of flood.
21. Learned counsel for the complainant would challenge the authencity and correctness of the entries made in the said registers on the premise that the entries have been manipulated to advance the the defence plea of the opposite party. We must reject this contention as devoid of any merits firstly because the above referred registers have been maintained by the insurance company in the discharge of their official business and in the regular course of business and, therefore, they can safely be treated as Account Books maintained by the opposite party in the course of their regular business within the meaning of Section 32 of the Indian Evidence Act. Such entries unless shown otherwise are admissible in evidence as proof of facts recorded therein.
The complainant has failed to provide any satisfactory explanation as to under what circumstances and for what purpose it had issued a cheque in the sum of Rs.13,466/- to the insurance company which find fully recorded in the premium and collection registers of the opposite party insurance company. A bald statement that the said premium was paid by the complainant for some other purpose or in relation to some other perils appears to be a farfetched one. We may also note that in respect of the second policy issued by Oriental Insurance Company Limited, the complainant had got the additional coverage of flood and allied perils cover after paying certain premium to that company in the month of August 1997 and, therefore, it is quite logical that the complainant had paid the additional premium in respect of the policy in question also.
22. It is also noteworthy that even as per the complainants own understanding and reckoning the peril of flood was not covered in the original policy. That is so apparent from a perusal of the audit reports filed by the complainant with the Income Tax Authorities for the relevant assessment year. In the said audited reports a sum of Rs.1,37,89,677.80 (the claim in the present complaint) had been charged to Profit & Loss Account as the complainant did not take flood risk insurance. This is an unequivocal admission on the part of the complainant about non-coverage of the risk of flood under the insurance policy in question and the complainant having obtained the tax benefits to that extent, their tax liability having been reduced in that relevant assessment year, the complainant cannot be allowed to plead that the insurance policy in question covered the risk of flood.
Complainant wants to blow hot and cold in the same breath which would falsify its stand and fortify the stand of the opposite party insurance company.
23. Thus, viewed from any angle, we have no hesitation to hold that the peril of flood due to which loss to the stocks of grains and pulses was occasioned to the complainant is not a peril covered under the fire policy C issued by the opposite party no.1 National Insurance Company Limited. The complainant is, therefore, not entitled to indemnification of the loss, allegedly, suffered by it due to the said peril. The insurance company was, therefore, justified in repudiating the claim made by the complainant and cannot be said to have committed any deficiency in service by doing so. The complaint appears to be wholly misconceived and frivolous against the opposite parties and is liable to be dismissed.
In the result, the complaint is dismissed against opposite party no.1 National Insurance Company Limited as well, leaving the parties to bear their own costs.
(R. C. JAIN, J.) PRESIDING MEMBER (S. K. NAIK) MEMBER