BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL HYDERABAD
C.C.No.85/2012
Between:
M/s. R.K. Mining Pvt. Ltd.,
Rep. by its Director,
B.Ravi
S/
Age : 34 years,
Office is at 1st Floor, H.No.1-2-49/15,
Nizampet Road,
Hyderabad – 500 072,
Andhra Pradesh. ….Complainant
And
1.M/s. ICICI Lombard General Insurance Company,
rd Floor,
Road No.1,
Hyderabad – 500 034.
2. M/s. ICICI Lombard General Insurance Company,
Zenith House, …
Counsel for the : M/s. D.
Counsel for the :
QUORUM:SRI R.LAKSHMI NARASIMHA RAO,HON’BLE INCHARGE PRSIDENT,
AND
SRI S.BHUJANGA RAO, HON’BLE MEMBER.
MONDAY, THE THIRTIETH DAY OF DECEMBER,
TWO THOUSAND THIRTEEN .
Oral Order: (Per Sri
***
This is a Consumer Complaint filed by the complainant u/s.17(1)(a)( alleging deficiency in service on the part of the opposite parties.
The brief case of the complainant as set out in the complaint is as follows:
The complainant company has been doing the business of mining activities and their offices are located in different parts of India and in that direction they deploy several heavy earth-machinery, which includes excavators etc. The complainant insured their vehicles with the opposite party insurance company. Accordingly, the complainant has insured their PC-300 excavator vehicle ( them from L & T Ltd. vide policy no.5005/0008066 for a period from 07.08.2009 to 06.08.2010 for a total sum of Rs.3,21,24,000/-. However, in the annexure I of the said policy, the year of manufacture is erroneously entered by the opposite parties as 2009, which has remained The complainant is using the vehicles for the purpose of their livelihood.
While so, on 01.08.2010 the complainant’s PC-300 Excavator vehicle bearing registration no.NL 01 D 7587, while in operation on the site of M/ at an F.I.R. was registered on 02.08.2010 in the based on the complaint given by the Production Manager of the complainant. The complainant has claimed insurance amount in accordance with the terms and conditions of the policy with the opposite parties and complied with all requirements, which were asked by the opposite parties for processing their claim. But the opposite parties have rejected their claim on the plea that the loss location is not covered under the policy and the location of operation stated in the insurance letter is not matching.
The opposite parties’ act of closing the complainant’s claim as ‘No Claim’ and ‘Nil Liability’ unfair trade practice and deficiency in service on the part of the Therefore, the opposite party company is liable to pay the claim amount of Rs.80,31,000/- along with interest at 18% p.a. from the date of their claim and the complainant is also entitled for suitable compensation and damages for undergoing mental agony and torture put forth by the opposite parties without any cogent and valid reason. Hence, the complaint.
Resisting the complaint, the opposite filed written version denying the material allegations made in the complaint. These opposite parties admitted that the complainant insured its machinery PC-300 excavators numbering 4 with opposite party no.2 vide policy no. 50005/0008066 for the period from 07.08.2009 to 06.08.2010 under Contractor’s Plant and Machinery Insurance Policy and that the total sum insured was Rs.3,21,24,000/-
The opposite parties contended that as per the policy, the mailing address of the insured was 1st Floor, H.No.1-2-49/15, It was clearly mentioned in the policy under special conditions ( be intimated within 7 days about any change in risk location. The complainant did not inform about the change of location to the opposite parties at any time after receipt of the policy copy. The opposite parties also did not receive any intimation or letter dt.17.08.2009 said to have been returned by the complainant seeking corrections in the policy. The complainant created the letter dt.17.08.2009 for the purpose of this case.
The opposite parties further contended that the complainant informed the loss of the excavator to the opposite party no.1 on 02.08.2010 and opposite party no.1 immediately appointed surveyor M/ to assess the loss. The surveyor visited the site on 03.08.2010 and took photos of the damaged machinery and also noted the particulars of loss and damages and submitted his reports on 08.11.2010 assessing the net loss at Rs.54,39,800/-. The surveyor also observed that the location of operation mentioned in the policy is different and not tallying with the actual operation of the location which is mentioned in the policy. The opposite party no.1 perused the report carefully and repudiated the claim stating that loss location is not covered under the policy and informed the same to the complainant through letter dt.23.12.2010. The repudiation of the claim by the opposite party no.1 is perfectly valid and justified as it is based on application of mind and relevant reasons, as such, it does not amount to deficiency in service.
the complainant is a private limited company and not a natural person to use the vehicles for livelihood. The complainant is using the machinery for its business purpose. The complainant being a private limited is also not entitled for any relief under prayer Clause-b of the reliefs which can only be claimed by natural persons. The complaint is therefore liable to be dismissed.
During the course of enquiry, on behalf of complainant company, its Managing Director filed his evidence affidavit, narrating the case of the complainant as set out in the complaint and filed Exs.A1 to A10. As against that evidence, on behalf of the opposite party insurance company, its legal manager filed his evidence affidavit and Exs.B1 to B4 are marked.
Both parties filed written arguments, in support of their respective cases We also heard the counsel for both the parties and perused the entire material placed on record.
Now the points for consideration are:
1). Whether the complainant company is a ‘Consumer’ as defined under Sec.2(1)(d) of Consumer Protection Act ?
2).Whether there is deficiency in service on the part of the as alleged by the complainant?
3) To what reliefs?
Point No.1:
The case of the complainant company is that the complainant is using the vehicles for the purpose of their livelihood by means of self-employment and as such, the complainant falls under the explanation to Sec.2(1)(d), as such, the complainant is a ‘Consumer’ within the meaning of Consumer Protection Act. On the other hand, the contention of the opposite parties is that the complainant is a private limited company and not a natural person to use the vehicles for livelihood and that the complainant is using the machinery for its business purpose and as such, the complainant is not a ‘Consumer’ within the meaning of Sec.2(1)(d) of the Consumer Protection Act.
It is an admitted fact that the complainant is a registered private limited company In of the complaint, the complainant has categorically stated that the complainant is doing business of mining activities and their offices are located in different parts of India and in that direction they deploy several heavy earth-machinery, which includes excavators etc. From the said statement in the complaint, it is clear that the complainant is not only using the damaged PC-300 Excavator vehicle, but also several other earth-machinery including excavators in their mining activities. From the complaint averments, it is evident that the complainant has not only insured the four PC -300 excavator vehicles, but also insured their almost all the vehicles with the opposite party.
In view of the above facts and circumstances, we are unable to accept the contention of the complainant that they are using the machinery for their livelihood The complainant has been using the machinery undoubtedly for its business purpose.
In the case of National Insurance reported in 2004 NCDRC Page 38, the while considering the provisions Sec.2(1)(d) and Sec.2(1)(o) of Consumer Protection Act,1986, at of its held :
“ The combined reading of the definitions of ‘consumer’ and ‘service’ under the Act and looking at the aims and object for which the Act was enacted, it is imperative that the words ‘consumer’ and ‘service’ as defined under the Act should be construed to comprehend consumer and services of commercial and trade-oriented nature only. Thus any person who is found to have hired services for consideration shall be deemed to be a consumer notwithstanding that the services were in connection with any goods or their user. Such, services may be for any connected commercial activity and may also relate to the services as indicated in Section 2(1)(o) of the Act”.
In the same to 60, the Commission held as follows:
“56. Therefore, the two fold classification is commercial purpose and non-commercial purpose.
57. If the goods are purchased for resale or for commercial purpose then such consumer would be excluded from the coverage of Consumer Protection Act,1986. Such illustration could be that a manufacturer who is producing one product ‘A’, for such production he may be required to purchase articles, which may be raw-material, then purchase of such articles would be for commercial purpose. As against this, the same manufacturer if he purchases a refrigerator, a television or an air-conditioner for his use at his residence or even in his office, it cannot be held to be for commercial purpose and for this purpose he is entitled to approach the Consumer Forum under the Act.
58. Similarly, a hospital which hires the services of a medical practitioner, it would be a commercial purpose. But, if a person avails of such services for his ailment it would be held to be not a commercial purpose.
59. Further, from the aforesaid discussion, it is apparent that even taking wide meaning of the words ‘for any commercial purpose’ it would mean that goods purchased or services hired should be used in any activity directly intended to generate profit. Profit is the main aim of commercial purpose. But in a case, where goods purchased or services hired in an activity which is not directly intended to generate profit, it would not be commercial purpose.
60. In this view of the matter, a person who takes insurance policy to cover the envisaged risk does not take the policy for commercial purpose. Policy is only for indemnification and actual loss. It is not intended to generate profit”.
In view of the facts and circumstances of the case and the above referred of the considered view, the complainant does not fall under ‘Consumer’ as defined under Sec.2(1)(d) of the Consumer Protection Act. Hence, this point is answered accordingly.
Point No.2:
It is an admitted fact that the complainant insured the damaged PC 300 excavator vehicle, along with 3 other similar vehicles purchased by them, with the opposite party insurance company, under the policy bearing no.50005/0008066 vide Ex.A2(=Ex.B1) policy, for the period from 07.08.2009 to 06.08.2010 for a total sum of Rs.3,21,24,000/-. It is also not in dispute that on 01.08.2010, the complainant’s PC-300 Excavator vehicle bearing registration no.NL 01 D 7587 while in operation, on the site of at and was destroyed completely. The Ex.A4, the copy of the F.I.R in Crime No.68/2010 registered at P.S. along with complaint copy dt.02.08.2010 and also Ex.B2 attested copy of surveyor’s report.
The opposite rejected the claim of the complainant on the ground that the loss location is not covered under the policy and the location of operation stated in the insurance letter is not matching.
The learned counsel for the complainant submitted that when the form for insurance was filled up by the opposite parties there were several mistakes committed by the opposite parties’ representatives noticed such irregularities, they have immediately brought it to the opposite parties’ notice, but it was never corrected and that no prudent person will keep such huge machinery at his office address and it cannot be the location for operating site and that the The learned counsel further submitted that it is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties. Similarly, it is the duty of the insurers and their agents to disclose all the material facts within their knowledge, since obligation of good faith applies to them equally with the assured. It is submitted that the opposite parties being an insurance company they have expected to know and understand the nature, character and operational features of movable/mobile machinery. But unfortunately the opposite parties have chosen to reject the complainant’s legitimate claim, which is illegal either in law or on facts and devoid of merits and the action of the opposite parties is nothing but an act of unfair trade practice and deficient in nature and hence they are liable to be compensated as prayed for.
Now the question determination is whether the opposite parties are justified in repudiating the claim of the complainants?
As per Ex.A2 policy, the mailing address of the insured was 1st floor, H.Noi.1-2-49/15, opp to It was clearly mentioned in the policy under special condition ( insurance company has to be intimated within seven days about any change in risk location’.
Regarding the special condition( of the policy, the contention of the complainant is that when after informing the above grave mistakes committed by the opposite parties, the staff of the opposite party’s company, who came to the office for registering the policy had deaf ear and totally reluctant to rectify the mistakes crept in the policy and now taking undue advantage of it, they are trying to avoid to pay the claim, which is unfair and clear deficient in their services offered by them On the other hand the contention of the opposite parties is that the complainant did not inform about the change of location to them at any time, after receipt of the policy copy and that the opposite parties did not receive any intimation or letter dt.17.08.2009 said to have been written by the complainant seeking correction in the policy and that the complainant created the said letter for the purpose of this case.
In addition to the evidence affidavit, the complainant filed Ex.A3 letter dt.17.08.2009 to prove that they met the opposite parties several times, to rectify the corrections The opposite parties denied to have received Ex.A3 letter. The complainant has not filed any proof that the opposite parties received original of Ex.A3 letter. Under these circumstances, we cannot accept the contention of the complainant that they informed the mistakes to the opposite parties as required under Special condition ( view of the facts and circumstances of the case, in our considered view, the non-compliance of the special condition ( is not fatal to deny the benefit under the policy to the complainant.
The contention of the complainant is that in the policy by the opposite parties, they have intentionally noted the branch office address of the complainant at Bellary, against column- “Location of operation”.
In the written version filed by the opposite parties, they have stated that since excavator had been kept at other location, the claim was repudiated They further added as follows:
i). that the complainant has given them four locations to cover the risk as detailed below and that the location where accident had occurred is not covered:
a.
b. D.No.1-82, besides LIC Office, c. Plot No.24, st Main, Bellary.
d. 1st Cross Bellary, Main road, ii). That they were not informed of the change of the location at any time as provided in the policy.
iii). That according to the Surveyor’s report, the damages were estimated to Rs.54,39,800/- only to the Excavator involved in the accident.”
When the complainant had really given four locations, it is not known as to why they did not mention all the four locations in the policy issued by them. Even the above four locations, according to the complainant As submitted by the learned counsel for the complainant, the excavators are heavy construction equipment consisting of a boom, stick, bucket and cab on rotating platform and the equipment sits atop an under carriage with tracks or wheels It can be placed at one place. It is heavy earth moving machine and cannot be fixed in the office premises. Excavators are also called diggers. No prudent person will keep such heavy machinery at the office address for operation purpose. When machine is movable/mobile nature, how it would be fixed and confined to a particular place as if it is a permanent fixture.
Insurance contracts are generally considered contracts of adhesion because the insurer draws up the contract and the insured has little or no ability to make material changes to it more, the insured is bound by clear and conspicuous terms in the contract, even if the evidence suggest that the insured did not read and understand them.
In view of the above facts and circumstances, the submission for the complainant that the staff of the opposite parties had simply and hastily filled their forms for issue of the policy without applying their mind and without consulting the complainant, appears to be true.
above discussed the opposite party insurance company cannot escape its liability under the vague terms of the policy and that there is deficiency in service and unfair trade practice on the part of the opposite parties and as such, they are liable to indemnify the loss caused to the complainant.
The complainant claimed damages of Rs.5 for the damage of the excavator. The complainant did not place any cogent evidence on record to prove the claimed damages. The surveyor appointed by the opposite parties to assess the loss caused, visited the site, noted the particulars of loss and damages and submitted his report on 08.11.2010, the copy of which is marked as Ex.B2. As per Ex.B2, the Surveyor assessed the net loss at Rs.54,39,800/-. The complainant has not adduced any evidence to disprove the assessment made by the surveyor appointed by the opposite parties. Therefore, we are of the view, the complainant is entitled and the opposite parties are liable to pay Rs.54,39,800/- with interest at 9% from the date of the claim till realization. Since interest on the damages is granted, the complainant is not entitled to other reliefs sought for in the complaint. Hence, this point is answered accordingly.
Point No.3:
In view of our finding on point No.1, the complaint is dismissed without costs. The complainant is at liberty to approach any appropriate Forum for the reliefs claimed in these proceedings and in case they choose to do so, according to law, they can claim benefit of Sec.14 of Limitation Act in terms of the order of the Apex Court in the case of Engineering Works vs. PSG Industrial Institute reported in II (1995) CPJ I SC.
INCHARGE PRESIDENT
MEMBER
Pm* Dt. 30.12.2013
APPENDIX OF EVIDENCE
Witnesses examined
Affidavit filed in Lieu of Chief Examination of Complainant
Evidence Affidavit Mr
ICICI General Insurance filed
Exhibits marked on behalf of the complainant:
Ex.A1 : Invoice dt.29-07-2008.
Ex.A2-: Insurance issued by
Ex.A3-: by Complainant Company to the
Ex.A4: FIR No.68/2010
Ex.A5: Email dt.04.8.2010 sent by the Opposite parties to the complainant.
Ex.A6: Lr.dt.23.12.2010 sent by opposite to the Complainant company
Ex.A7: Legal notice issued to the by the complainant.
Ex.A8: Acknowledgement
Ex.A9: BSNL telephone
Ex.A10: true copy of an extract from the minutes of meeting of the
Board of of complainant held on 01.07.2012
Exhibits marked on behalf of the Ex.B1: Copy of policy along with terms and conditions.
Ex.B2: Copy survey report dt.08.11.2010
Ex.B3: Repudiation lr.23.12.2010 issued by
Ex.B4: Proposal Form.
INCHARGE PRESIDENT
MEMBER
PM* 30.12.2013
