Sri Shyamal Gupta, Member
This is a complaint filed by M/s Kohinoor Steel Pvt. Ltd. u/s 12(a), read with 17(a)(i) of the Consumer Protection Act, 1986 alleging gross deficiency in service in the matter of settlement of its insurance claim by the OP.
Succinctly put, the case of the Complainant is that it took one “Erection All Risks Insurance Policy” from the OP on payment of due premium. Such policy was taken to cover the construction works of the Complainant, including erection, testing, commissioning at the site. The part of the project was completely commissioned and tested in the month of July, 2007. Hundreds of equipments were installed in such projects by several vendors and the Complainant on installation of such equipments could perform cold testing only. On 22-03-2007, there was a thunder storm and due to strong wind pressure, damage was caused to the EOT crane, water tank and galvanized iron sheets at the factory premises. By issuing a letter on 24-03-2007, the Complainant duly informed the matter to the OP. Accordingly, a Surveyor was deployed by the Insurer to assess the loss. The Surveyor submitted its final report on 20-02-2008. The Complainant submitted its final claim in respect of the EOT Crane for a sum of Rs. 38,03,860/- with the OP Insurer. After prolonged delay, the OP declined to pay any sum in respect of the loss caused to the EOT crane, but offered to settle its claim by paying a paltry sum of Rs. 25,360/- in respect of the loss caused to the water tank. Although the Complainant strongly disputed such poor quantification of loss, it did not cut any ice with the OP. Therefore, the Complainant filed this complaint case.
The complaint was resisted by the OP, who filed WV, evidence etc. in support of its contention. The OP submitted that in terms of the laid down provisions of the subject insurance policy, the liability of the Insurance Company commenced from the time of unloading of the property specified in the schedule and continued until immediately after the first test operation or test loading was concluded (whichever was earlier), but under no circumstances beyond four weeks from the day on which after completion of erection a trial run was made and/or readiness for work was declared by the erectors/contractors, whichever was earlier. Further, in terms of the subject policy, if a part of the plant or one or several machine was/were tested and put into operation, the cover and consequently the liability of the Company for that particular part of the plant and machine would get come to an end, whereas, it would continue for the remaining parts which were not yet ready. The Surveyor reported that the loss in respect of the EOT Crane was not admissible. However, he allowed an amount of Rs. 25,363/- in respect of the damage caused to the overhead tank. Accordingly, the OP offered to pay the said sum to the Complainant and sent the discharge voucher to it.
The Complainant filed one separate petition for condonation of the delay in filing this case. Accordingly, by passing an order on 07-08-2014, the delay was condoned.
The moot point for determination in this complaint case is whether the EOT Crane was covered under the insurance policy as on the date of peril and further, whether the Complainant is entitled to the relief sought for in this case, or not.
Both sides were represented by their respective Ld. Advocates, who were heard at sufficient length. We have also gone through the material on record that includes, survey report, policy wordings, Affidavit-of-Evidence of the parties, replies given by the respective parties as well as the Surveyor in respect of the questionnaire put forth on behalf of other side.
It is seen from the Commissioning Certificate issued by M/s Bunty International dated 27-10-2006 that it claimed to have successfully and fully erected and commissioned two nos. E.O.T. Cranes at the Complainant’s site on 25-10-2006. It was also stated therein that satisfactory commissioning and trial run was completed under the supervision of authorized representative of the Complainant. It further confirmed that the cranes were capable enough to be commercially used to full capacity operation.
Banking on this Certificate, Ld. Advocate for the OP averred that in accordance with the terms and conditions of the insurance policy, test loading was supposed to be concluded within four weeks from 25-10-2006. Thus, he argued that, as on the date of peril, i.e., on 22-03-2007, the EOT Crane was not under the ambit of the insurance policy.
On scrutiny of the policy schedule, we, however, find that due provision was there in the policy to the effect that if the work of erection and/or test operation not completed within the time specified in the policy, the OP might extend the period of insurance on payment of additional premium at agreed rates.
It is seen from the documents on record that initially the Complainant took insurance coverage for a sum of Rs. 60,50,00,000/-. However, w.e.f. 05-09-2006, the extent of coverage was reduced from the aforesaid sum to Rs. 40,00,00,000/- which continued till 04-08-2007.
In this regard, it is clarified by the Ld. Advocate for the Complainant that the power plant and steel melting shop, where the loss pertaining to the crane occurred, was yet to be fully erected and commissioned till 04-08-2007. So, due indemnify for the sum of Rs. 40,00,00,000/- was maintained till that day. He further contended that integral testing of plant/SMS was possible only when the unit was completed and commissioned, allowing hot testing.
Given that the extent of indemnity to the tune of Rs. 40,00,00,000/- remained the same as on the date of peril as before, it can reasonably be presumed that as on 22-03-2007 (date of peril), the EOT crane was covered under the policy. In case the said part was indeed not covered under the policy w.e.f. 22-11-2006 (four weeks after erection/commissioning of the EOT Crane by the vendor), it was but natural that while renewing the insurance policy w.e.f. 05-12-2006, the coverage of insurance would proportionately get reduced and the Complainant would pay lesser premium. That being not done, it can safely be inferred that the EOT crane was very much covered under the policy. In fact, no such document is placed from the side of the OP to prove that the EOT Crane was outside the domain of coverage as on the date of peril. Accordingly, we cannot approve the findings of the Surveyor or the decision of the OP to settle the subject claim by paying a paltry sum of Rs. 25,360/-.
On due consideration of the facts and circumstances of the case in its entirety, we find enough merit in this case to decide it in favour of the Complainant.
The Complainant claimed a sum of Rs. 38,35,060/- from the OP towards the loss suffered by it. It appears from the survey report that, after thorough scrutiny, the Surveyor initially assessed the loss at Rs. 21,81,010/-. It is another matter that in view of his subsequent findings that at the material time of peril, the EOT Crane was not covered under the policy, he disallowed any indemnify in respect of the said part and only allowed Rs. 25,363/- towards the loss caused to the PVC tank.
Be that as it may, the initial loss assessed by the Surveyor is found to be in order and accordingly, we hold the OP liable to pay 60% of the sum of Rs. 21,81,010/- to the Complaint. Since the Complainant has not arrayed Royal Sundaram Alliance Insurance Co. Ltd. in this case, who was the co-Insurer of the subject policy, no direction can be given to it to pay the rest of the decretal sum. In the interest of natural justice, however, we accord due liberty to the Complainant to initiate a fresh complaint against M/s Royal Sundaram Alliance Insurance Co. Ltd. before the appropriate Court of Law claiming due relief from it within 40 days henceforth.
Hence,
O R D E R E D
The case stands allowed on contest against the OP with a cost of 25,000/-. OP is directed to pay 60% of the sum of Rs. 21,81,010/- to the Complainant within 40 days henceforth along with simple interest @ 9% p.a. over the aforesaid sum of Rs. 21,81,010/- w.e.f. 20-02-2014 till full and final payment is made.
