Punjab

Rupnagar

CC/21/53

M/s Sahib Industries - Complainant(s)

Versus

Cholamandlam MS General Insurance Co. - Opp.Party(s)

Sh. S.S.Rattan, Adv.

31 Mar 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, RUPNAGAR

                             Complaint Case No. 53 of 22.07.2021

                   Decided on : 31.3.2023

M/s Sahib Industries, Near Gurmeet Sagar Trust, Shri Anandpur Sahib, Tehsil Shri Anandpur Sahib,         District Rupnagar through its proprietor Sh. Dalbir Singh.                                                                                                        ……Complainant

VERSUS

Cholamandalam General Insurance company ltd. S.C.O/2463-2464, II Floor,

Sector 22-C, Chandigarh through its Branch Manager.                                                                                                                                ..….Opposite Party (OP)

(Complaint under the provisions of Consumer Protection Act)

QUORUM:

                   KULJIT SINGH, PRESIDENT

                   RANVIR KAUR, MEMBER

                   RAMESH KUMAR GUPTA, MEMBER

 

ARGUED BY:

 

For complainant:            Sh. S.S. Rattan, Advocate

For OP:                          Sh.Amit Gupta, Advocate   

         

 ORDER

         KULJIT SINGH PRESIDENT

1. The present consumer complaint was instituted by the Complainant, on 22 July, 2021, before this Commission, aggrieved by rebuttal of his claim by OP  on 30-01-2020 (Ex OP-3) against “standard fire and special peril policy” insurance policy number 2130/01526335/000/00 (Ex C-3) Dated 07-09-2019 occupancy as "contents in shop dealing with non-hazardous goods at location:” Facing BBMB Cannel Near Gurmat Sagar Trust Anandpur Sahib Rupnagar”, insured with OP through Oriental Bank of Commerce, Branch Sri Anandpur Sahibin order to cover the risk/loss due to, destruction or damage  storm, cyclone,typhoon, tempest, hurricane, tornado, flood and Inundation”to the factory building and also the plant and machinery, secured above said insurance policies from the appellant.. And in his complaint made following averments as under:-

1. thaton midnight of dated 15.09.2019, due to heavy rain fall the said      industry suffered huge damage and due to said rainy water, the       Danga(stopped), Walls and foundations of the said industry were   damaged. Complainant informed the OP regarding the said incident.
2. that, OP send his surveyor to visit the spot and the concerned surveyor inspected the spot and made the report regarding said damage and that   the surveyor has accessed the loss to the tune of Rs. 1,51,037/- and has   submitted his report dated 20.12.2019, afterthat, OP demanded     documents form complainant through his letter dated 20.11.2019and         complaint submitted all the entire documents asdemanded by OP. 
3. The OP after fulfilling all the documentary formalities from complainant         settled and admitted the claim of complainant to the amount of Rs.       1,51,037/- regarding the said damage and also obtained the consent letter   from complaint on dated 21.12.2019 and also obtained the bank details of complaint for the purpose of deposit the claim amount in favor of    complainant.
4. That, now, OP has no reason to withhold the settled claim of       complainant. The OP failed to pay the said claim amount of compliant     without any reasonable cause. The complainant many times requested       OP to pay the settled amount to complainant, but OP linger on the matter           with one pretext or the other.
5. That complainant alleged that due to the deficiency in services and unfair        trade practice on the part of the OP the complainant has suffered         monetary, physical, mental pain, agony, harassment and lose.
6. That complainant sought the following reliefs against the OPs:-

1.   To pay the amount of Rs.1,51,037/- admitted and settled claim                                 amount of the complainant along with interest @ 12% perannum.
2.   To pay Rs. 2,00,000/- as damages to the complainant on this                                           score also.
3.   To pay Rs.30,000/- as litigation expenses.

2.      Upon notice, the OP has appeared and filed written reply taking preliminary objections as under:-

1. that the complaint firm is doing the business of manufacturing and as such has taken the insurance policy number 2130/01299843/000/00under standard fire and special peril policy (herein referred  as “STFIPerils”) covering the building for a sum of Rs. 2.00 lakhs, furniture and fixtures of Rs. 4,52,00/- plant and machinery of Rs. 6,50,000/- totaling Rs. 13,02,000/- after payment of premium of Rs. 3826/- and the said cover was granted as per terms and conditions of the policy with effect form 13.09.2018 to 12.9.2019.
2. That thereafter on 9.9.2019, the complaint has again opted for the                 standard Fire and Special Peril Policy w.e.f. 9.9.2019 t 8.9.2020 by                     changing occupancy form tile andpottery work to contents in shop                      dealing with non-hazardous goods. The said         standard fire andspecial                      Peril Policy number 2130/01299843/000/00covering the shop at                     location: “

“Facing BBMB Cannel Near Gurmat Sagar Trust Anandpur Sahib Rupnagar” for a period form 13.9.2018 to 12.9.2019 strictly subject to the terms and conditions ofthe policy.”

3. That the complainant has intimated with regard to the loss and                                damage to retaining wall of factory building approximately due to                         flood/ inundation/subsidence on 16.9.2019 on account of heavy rain                      fall since 13.9.2019.
4. That accordingly after receiving the intimation competent authority                       has deputed Sh. Ravinder Dhingra, Surveyor and loss assessor no.                      733, SLA 72609 valid till 3.11.2021         IIISLA Membership No.                               A/N/02077, regd. Officer : H. No. 1535, Ext.:03, Gillco          Valley,                    Sector-127, Kharar, SAS Nagar, Mohali and the surveyor has visited                              that premises on 19.2.2019. That the surveyor has accessed the loss to                           the tune of Rs. 1,51,037/- and has submitted his report dated                                      20.12.2019.
5. That the competent authority of the company had duly perused all the                     documents   submitted by the complainant along with surveyor report                             and has found that the claim of the complainant was not payable on                     the following grounds:-

            “policy covers shop whereas loss took place at manufacturing unit. Hence there is a occupancy difference, claim is not payable”.

6. Thus the claim of the complainant was not tenable under terms and               conditions of the policy and as such by repudiating the claim, there is                             no deficiency in service on part of answering insurance company and                           as such the present complaint is liable to be dismissed. 

On merits,OP submitted as under:-

7. That (as per para 9 of written reply)  that no cause of action arose to the complainant for filling the present complaint firm is doing the business of manufacturing and as such has taken the insurance policy number 2130/01299843/000/00 under standard Fire and special peril policy covering the building for a sum f Rs. 2.00 lakhs, furniture and fixtures of Rs. 4,52,000/- after payment of premium of Rs. 3826/- and the said cover was granted as per terms and conditions of the policy with effect form 13.09.2018 to 12.9.2019.
8. That thereafter on 09-09-2019 complainant has again opted for the standard fire and special peril policy w.e.f. 9.9.2019 to 8.9.2020 by changing occupancy form Tile and pottery work to contents in shop dealing with non-hazadous goods. The said standard fire and special peril policy number 2130/01299843/000/00 covering the shop at location:

“Facing BBMB Cannal Near GurmeetSagar Trust Anadpur Sahib Rupnagar”,for a period from 13.9.2018 to         12.9.2019 strictly subject to the terms and conditions of the      policy.

1. That the complainant has intimated with regard to the loss and damage to regard to this loss and damage to retaining wall of factory building approximately due to flood/ inundation/ subsidence on 16.9.2019 on account of heavy rain fall since 13.9.2019.
10.  That accordingly after receiving the intimation competent authority has deputed Sh. Ravinder Dhingra, Surveyor and loss assessor no. 733, SLA 72609 vaild till 3.11.2021 IIISLA Membership No. A/N/02077, regd. Officer H.No. 1535, Ext. 03, Gillo Valley, Sector-127, Kharar, SAS Nager, Mohali and the surveyor has visited that premises on 19.02.2019.
11. That the surveyor has accessed the loss to the tune of Rs. 1,51,037/-  and has  submitted his report dated 20.12.2019.
12. That the competent authority of the company had duly pursued all the documents submitted by the complainant along with the surveyor report and has found that the claim of the complaint was not payable on the following grounds:-

“policy covers shop whereas loss took place at manufacturing

unit. Hence there is a occupancy difference,claim is not

•  

Thus the claim of the complainant was repudiated as the claim of the complainant was found non tenable on account of terms and conditions of

the policy. That the complainant was duly conveyed vide registered letter

dated 30.1.2020.

3. After hearing learned advocates for both the parties and after considering the documents and evidences, the following issue arises before the bench as under;-

1. Whether the rebuttal of the claim of the complaint is correct or not as per the terms and condition of the policy ?
2. Whether the complaint is to be allowed or not ?

4. That while perusing documents and evidence, the bench observed that two no. policies are referred in the pleading the detail of which are as under:-

Year	Policy No.	Policy Period	Location	Occupancy
2018-2019	2130/01299843/000/00	13-09-2018 TO                12-09-2019	Facing BBMB Cannel Near Gurmat Sagar Trust Anandpur Sahib Rupnagar	Tile and Pottery work
2019-2020	2130/01526335/000/00	09-09-2019 TO               08-09-2020	Facing BBMB Cannel Near Gurmat Sagar Trust Anandpur Sahib Rupnagar	Contents in shop dealing with non-hazardous goods

 

“Scope of Cover

Annexure to Schedule forming part of Policy No.. 2130/01526335/000/00

location No.: 1     Location:                           'FACING BBMB CANNAL NEAR GURMAT SAGAR TRUST  ANANDPUR SAHIB RUPNAGAR SO PUNJAB ROPAR ANANDPUR SAHIB SO RUPNAGAR PUNJAB ROPAR    PIN-140118 . Occupancy:          Contents In Shops deling in non hazardous goods Nature of goods:
	Building Building	Plant And Machinery Plant And Machinery	Stocks Stocks	Total
Sum Insured (In Rs.)	4,50,000	6,25,000	2,25,000	13,00,000

 

5. Since the incidence occurred  on the  midnight of dated 15.09.2019, due to heavy rain fall the said premisesof the complainant suffered huge damage and due to said rainy water, the insurance policy which was operative on that day   was  “STFI Perils” insurance policy number 2130/01526335/000/00 (Ex C-3) Dated 07-09-2019 with policy period 09.09-2019 to 08.09.2020.
6. That the Complainant informed the OP regarding the said incident. OP send his surveyor to visit the spot and the concerned surveyor inspected the spot and made the report regarding said damage andthesurveyoraccessed  the loss to the tune of Rs. 1,51,037/- and has submitted his report dated 20.12.2019.
7. That,after that, OP demanded certain documents EX-C6  form complainant through his letter dated 20.11.2019 and       complainant submitted all the entire documents as demanded by OP.
8. That that OP vide letter Dated 30-01-2020 Ex- OP3 repudiated  the claim of the complainant onthe following ground:-

            “policy covers shop whereas loss took place at manufacturing unit. Hence there is a occupancy difference, claim is not payable”.

9. We have noted that OP in the written reply referred to the “STFI Perils” insurance policy number2130/01299843/000/00. Whereas this policy was for the year 2018-2019 and the claim was for the year 2019-2020 with policy as “STFI  Perils”  insurance  policy  number  2130/01526335/000/00 (Ex C-3) Dated 07-09-2019 with policy period 09.09-2019 to 08.09.2020.
10. We have noted that policy is in the name of M/s Sahib Industries,Facing BBMB Cannel Near Gurmat Sagar Trust Anandpur Sahib Rupnagar with  policy as “STFI  Perils”  insurance  policy  number  2130/01526335/000/00 (Ex C-3) and the Risk Location is also in the name of M/s Sahib Industries,Facing BBMB Cannel Near Gurmat Sagar Trust Anandpur Sahib Rupnagar.Hence whether it is Factory ( referred by Surveyor in his report)or shop or manufacturing unit the fact is that as per policy the scope of the cover was forBuilding, Plant And Machinery , Stocksis in the name of M/s Sahib Industries,Facing BBMB Cannel Near Gurmat Sagar Trust Anandpur Sahib Rupnagar.Complainant has got coverage for the damage to the building.
11. Surveyor has rightly assessed the loss to the tune of Rs. 1,51,037/- and the insured has agreed to it.  Surveyor has visited         thatpremises on 19.2.2019. That the surveyor has accessed the loss tothe tune of Rs. 1,51,037/- and has submitted his report dated  20.12.2019 some of the operative part is as under:-

“In pursuant to your e-mail instruction dated 18.09.2019, the undersigned contacted the Insured’srepresentative telephonically and did proceed to the risk location address of insured’s on dated 19.09.2019as per prior appointment for the purpose of surveying and assessing the loss and damage to retaining wall offactory building belonging to the insured due to Flood/Inundation/Subsidence. The claim is close proximity in nature which got cleared due to existence of valid previous policy number 2130/01299843/000/00 froml3.09.2018 to 12.09.2019 in which claim of same retaining wall damaged preferred on dated 25.09.2018 was honored earlier by insurer as per previous survey report placed on record. Somephotographs of previous claim provided by insured perused for authenticate the reconstruction of retainingwall last year and damages claimed now also are fresh in nature.The undersigned was informed by the insured’s representative that on dated 16.09.2019, their rear retainingwall got discovered noticed collapsed due to flood/inundation consequent to heavy rainfall in vicinity since13.09.2019.The news of occurrence of heavy rain fall & storm in vicinity got published in newspaper as wellfor corroborating incident. The matter not got reported to police station or Fire brigade by insured beingnobody was hurt in mishap.

During my visit, inspection of the affected site was carried out carefully. The factory building was noticed tobe situated off main road on elevated soil hilly terrain surrounded by rainy “Nallah” in back with inherent location disadvantage. Prime facie, the retaining wall noticed collapsed due to inundated water accumulatedon top got discharged with turbulent stream downwards and probably overflowing of Nallah leading tosubsidence at the bottom giving circumstantial evidence of occurrence of inundation being not particularlydefined as such in policy. Other partial cracks observed in building as well appeared to have  repaired previously. A retaining wall is a structure that holds soil behind it and helps stem the movement of soil and control of the water flow. Generally, it is not the part of building   as per underwriting insurance practice of specifying it additionally in policy schedule, however, in absence of specifying excluding retaining wall inPolicy, it may or deem to be taken to be part of building being cannot be erected without such incidentalworks carried out preliminary in hilly terrain & looking to honoring of similar claim by insurer earlier.Enquiry in vicinity was done & positive affirmation received. Nature & extent of damages of building werenoted down in light of prima facie damages were found to be consistent with the notified cause (STFICover) held covered under Fire & allied perils coverage.

The assessment is done on the basis of discussion held along with submission of relevant documents toundersigned and observation made with practical insight for the consideration of insurer in detail as below

INSURANCE PARTICULARS

INSURER                               M/s Cholamandalam MS General Insurance Company Limited,Chandigarh

INSURED                               M/s Sahib Industries, Facing BBMB Canal, Near GurmatSagar Trust, Anandpur Sahib, Rupnagar, Punjab

POLICY NO.                          2130/01526335/000/00

PERIOD                        09.09.2019 to 08.09.2020

TYPE OF POLICY                           Standard Fire & Special perils Insurance   Policy

SUM INSURED                      Rs. 450000/- for Building

LOCATION OF RISK             Facing BBMB Canal, Near GurmatSagar Trust AnandpurSahib                                                                           

ACTUAL RISK                       Facing BBMB Canal, Near GurmatSagar Trust, Anandpur Sahib

RISK/OCCUPANCY               Mfg. of solid & hollow paving blocks

MAIN CLAUSES                    Agreed Bank Clause, Earthquake (Fire and  shock) and Designation of property clause, STFI Add on cover

WARRANTY                          Kutcha Construction & other warranties  imposed as per  policy

FINANCIAL INTEREST        Oriental Bank of Commerce, Anandpur Sahib

**********

NET LIABILITY

Hence, the net liability under the claim is Rs 151037/- as per terms & conditions of policy issued subject to consideration of cliam by insurer .Reinstatement of sum insured to be taken care since date of loss by adjustment of premium in claim amount.The insured has provided concurrence on quantum of loss verbally.”

12. To clear the terminology of ambiguity the bench relied upon the judgement of Hon’ble Supreme Court of Indis in the case of  HARIS MARINE PRODUCTS VERSUS EXPORT CREDIT GUARANTEE CORPORATION (ECGC) LIMITED some of the operative part are as under:-
13.  

common in them and it is often very uncertain what the parties tothem mean. In such cases the rule is that the policy, being drafted in language chosen by the insurers, must be taken most strongly against them. It is construed contra proferentes, against those who offer it. In a doubtful case the turn of the scale ought to be given against the speaker, because he has not clearly and fully expressed himself.Nothing is easier than for the insurers to express themselves in plain terms. The assured cannot put his own meaning upon a policy, but, where it is ambiguous, it is to be construed in the sense in which he might reasonably have understood it. If the insurers wish to escape liability under given circumstances, they must use words admitting ofno possible doubt”.

1. . On application of the above principle to this Policy, and taking intoconsideration all relevant documents, this Court is of the opinion that the date of loading goods onto the vessel, which commenced one day prior to the effective date of the policy, is not as significant as the date on which the foreign buyer failed to pay for the goods exported, which was well within the coverage period of the Policy. Thus, the claim could not be dismissed simply on such basis, especially given that the date of loading the goods onto the vessel was immaterialto the purpose for which the policy was taken by the appellant.

B. Rule of contra proferentem

• 16. It is entrenched in our jurisprudence that an ambiguous term in an

insurance contract is to be construed harmoniously by reading the contract in its entirety. If after that, no clarity emerges, then the term must be interpreted in favour of the insured, i.e., against the drafter of the policy. In deciding the applicability of a cover note on houses swept away by floods, a Constitution Bench of this Court in General Assurance Society Ltd. v. Chandumull Jain18 heldas follows:

“In other respects there is no difference between a contract ofinsurance and any other contract except that in a contract ofinsurance there is a requirement of uberrima fides i.e., good faith onthe part of the assured and the contract is likely to beconstrued contra proferentem that is against the company in case ofambiguity or doubt… ( I)n interpreting documents relating to acontract of insurance, the duty of the court is to interpret the words inwhich the contract is expressed by the parties, because it is not for thecourt to make a new contract, however reasonable, if the parties havenot made it themselves”.

(emphasis supplied)

While the court ultimately denied insurer’s liability, it laid down themanner in which ambiguities were to be interpreted. Since then, a catena ofjudgments has upheld this approach. In United India Insurance Co. Ltd. v.Pushpalaya Printers19, a Division Bench of this Court was confronted with interpreting the term ‘impact’ in an insurance policy for protection againstdamage caused to the insured building. Interpreting the term to include damagecaused by strong vibrations by heavy vehicles without ‘direct’ impact, this Courtheld:

“The only point that arises for consideration is whether the word

“impact” contained in clause 5 of the insurance policy covers the

damage caused to the building and machinery due to driving of the bulldozer on the road close to the building… ( I)t is also settled position in law that if there is any ambiguity or a term is capable oftwo possible interpretations, one beneficial to the insured should beaccepted consistent with the purpose for which the policy is taken,namely, to cover the risk on the happening of certain event… Wherethe words of a document are ambiguous, they shall be construedagainst the party who prepared the document. This rule applies tocontracts of insurance and clause 5 of the insurance policy even afterreading the entire policy in the present case should be construedagainst the insurer”.

Similarly, in SushilabenIndravadan Gandhi v New India AssuranceCompany Ltd.,20this Court charted the evolution of the rule of contraproferentem, and relied inter alia on its explanation as provided under Halsbury'sLaws of England:21

                   “Contra proferentem rule.—Where there is ambiguity in the policy the

                   court will apply the contra proferentem rule. Where a policy is                              produced by the insurers, it is their business to see that precision and

clarity are attained and, if they fail to do so, the ambiguity will be

resolved by adopting the construction favourable to the insured.

Similarly, as regards language which emanates from the insured, such

as the language used in answer to questions in the proposal or in a

slip, a construction favourable to the insurers will prevail if the

insured has created any ambiguity. This rule, however, only becomes

operative where the words are truly ambiguous; it is a rule for

resolving ambiguity and it cannot be invoked with a view to creating a

doubt. Therefore, where the words used are free from ambiguity in the

sense that, fairly and reasonably construed, they admit of only one

meaning, the rule has no application.”

The rule of contra proferentem thus protects the insured from the vagariesof an unfavourable interpretation of an ambiguous term to which it did not agree.The rule assumes special significance in standard form insurance policies, calledcontract d’ adhesion or boilerplate contracts, in which the insured has little to nocountervailing bargaining power.

13. On application of the above principle to this Policy, and taking intoconsideration all relevant documents, this Court is of the opinion that whether it is shop or manufacturing unit, or shop is not as significant, the fact is that it is building which is well within the coverage period of the Policy and is in the same name and location as provided in the policy. Surveyor report has also covered this aspect and has confirmed the same.OP has created ambiguity in the interpretation just to repudiate the claim of the insured i.e. complainant.
14. Thus from above it is concluded that as for as scope of cover is concerned the name of the insurer and address is same as that of Risk location.  OP has created ambiguity in the interpretation just to repudiate the claim of the insured i.e. complainant.The insurance is intended to provide for the payment ofcompensation in the event of loss due to, destruction or damage storm,cyclone, typhoon, tempest, hurricane, tornado, flood and Inundation.”
15. To deny the Complainant’s claim over an incorrect interpretation of an ambiguous term, that too with delay from the date of rejection of claim i.e. from 30-01-2020 to onward  amounting to , goes against such duties, especially given the fact that the Complainant’s had transacted with the OP on previous occasions, the fact reported by  surveyor in his report reproduced as under:-

“ The claim is close proximity in nature which got cleared due to existence of valid previous policy number 2130/01299843/000/00 from 13.09.2018 to 12.09.2019 in which claim of same retaining wall damaged preferred on dated 25.09.2018 was honoured earlier by insurer as per previous survey report placed on record.”

16. In view of the above consideration and findings and as per the law settled by the Hon’ble Supreme Court we are of the opinion that the Complainant’s complaint is consequently allowed  with the directions to the OPs as under:-

1. To pay Rs.1,51,037/- along with interest @ 6% per annum from the date 30.01.2020 on which the         OP intimated the complainant regarding repudiating the claim .
2. To pay Rs. 5000/- as compensation on account of physical harassment and mental agony.  
3.          To pay Rs.3000/- as litigation expenses.
4.           The OP is further directed to comply with the said order within a period of 30 days from the date of receipt of certified copy of this order. Free certified copy of this order be supplied to the parties, as per rules. The file be indexed & consigned to the Record Room.

 

1.  

(Kuljit Singh)

President

 

 

(Ranvir Kaur)

                     Member

 

 

(Ramesh Kumar Gupta)

                     Member