Orissa

Cuttak

CC/46/2012

P Vimal Naidu - Complainant(s)

Versus

Divisional Manager,The New India Insurance Co Ltd - Opp.Party(s)

R K Pattanaik

30 May 2017

ORDER

IN THE COURT OF THE DIST. CONSUMER DISPUTES REDRESSAL FORUM,CUTTACK.

C.C No.46/2012

 

Director,

NAIDU DIGITAL PHOTOLABS PVT. LAB

P.Vimal Naidu,

S/o:Late P.K.S.Naidu,

At:Manisahu Chhak,PO:Buxibazar,

Town/Dist:Cuttack.                                                                    … Complainant.

 

                Vrs.

 

1.        Divisional Manager,,

The New India Insurance Co. Ltd.,

Cuttack Divisional Office-2,

                  Mahashraman,Cantonment Road,Cuttack

 

2.        Regional Manager,

The New India Insurance Co. Ltd.,

Bhubaneswar Region,Alok Bharati Complex,

Saheednagar,Bhubaneswar.                                                       … Opp. Parties.

 

Present:              Sri Dhruba Charan Barik,President.

Sri Bichitra Nanda Tripathy, Member.

 

Date of filing:   24.12.2012

Date of Order: .30.05.2017.

 

For the complainant        :       Sri R.K.Pattnaink,Advocate & Associates.

For the O.Ps.                     :       Mr. A.Khan,Adv. & Associates.

 

Sri Bichitra Nanda Tripathy, Member.

                The case is against deficiency in service on the part of O.Ps.

1. Shortly the case is that the complainant opened a photo studio named as ‘Naidu Digital Photo Labs Pvt. Ltd.”.  The entire unit was financed by Bank of India,Nayasarak Branch and the loan has been liquidated in the meantime.  The complainant had taken an insurance policy with the O.Ps to secure its machinery and electronic equipment.  The sum assured under the policy was Rs.42,91,000/- and the said policy was valid from 29.08.2009 to 28.08.2010(Annexure-1 & 2).  There was a breakdown in the system of photo equipment machinery on 31.03.2010 at about 11.30 A.M.  There was problem, on the laser system of the equipment and the quality of photo prints were not better and strip was noticed on the photographs which resulted in dissatisfaction among the customers.  The complainant brought such facts to the notice of the O.Ps and also to the notice of manufacturer of such instrument i.e. Noritsu India Pvt. Ltd. for rectification of the defect.  On 08.04.2010 the manufacturer visited the site and observed that the laser unit of the photography machinery equipment is totally damaged.(Annedure-3).  On 08.04.2-010 the surveyor of the O.Ps visited the site and made a detailed survey, took photographs of the machine and went through the technical report as given by the producer.  The complainant to run his business purchased a New machine for Rs.4,81,434/-(Annedure-4) and lodged claim with the O.Ps on 22.09.2010 claiming a sum of Rs.5,00,000/- as replacement cost of the laser unit(Annexure-5), the O.Ps intimated that the claim is not payable due to malfunctioning of the insured unit which falls under special exclusion clause Section-1,Clause-B,C,D & E of general conditions of the policy(Annexure-6).  The O.Ps repudiated the claim on 12.11.2010 and closed the file as ‘No claim’. (Annexure-7).  The complainant made a representation to the grievance cell of the O.Ps on 01.03.2011 giving details of facts and requested to reviews their decision of closing the file as no claim otherwise he shall be constrained to take appropriate action ion the court of law. (Annexure-8).  But it yielded no result.  Finding no other way, the complainant filed the case under this Hon’ble Forum.  He has prayed to direct the O.Ps to pay the replacement cost of the laser unit Rs.4,81,434/-,  interest there on @ 12% per annum from 31.03.2010 till payment Rs.3,16,695/- , compensation towards mental agony and harassment Rs.1,00,000/- and cost of litigation Rs.50,000/-.  Thus claimed a total sum of Rs.9,48,129/-.
2. The O.Ps vide their written version dt.03.08.2012 have admitted that they have issued an Electronic Equipment Insurance Policy bearing No.550400/44/09/58/30000016 which was valid from 29.08.2009 to 28.08.2010.  Covering the risk of the instrument as described in schedule-1 of the insurance policy subject to certain terms and conditions and exclusion clause of the insurance policy. (Annexure-A).  During the currency of the policy the complainant intimated O.P No.1 about non-functioning of the printer processor (Annexure-B).  On receipt of the claim intimation claim forms were supplied to the complainant and duly licensed surveyor Sri B.Mohanty was deputed for survey.  The complainant submitted the claim forms on 06.04.2010(Annexure-C).  The surveyor submitted his report assessing the net loss as Rs.1,94,980/- but clearly observed that the machine was not under break down when the survey was conducted rather the machine had developed defect/error/malfunctioning in certain spares only which do not have any basic reason for indemnify.(Annexure-D).  From the minutes of meeting dt.08.04.2010 between the representative of M/s. Noritsu and the representative of M/s. Naidu Digital Photo labs Pvt. Ltd., it clearly transpires that on getting the complaint from the complainant the technician of the said firm identified the defect to be due to malfunctioning of laser unit and accordingly he advised to replace the said unit with a new one (Annexure-E).  Since such type of loss was not falling within the scope and ambit of the electronic equipment insurance policy condition and as the claim was hit by exclusion clause of the insurance policy, Section-1, clause-B,C,D & E the claim of the complainant was repudiated by letter dt.12.11.2010.(Annexure-F).  The defect as found out in the printer processor was due to general wear and tear and the loss is due to error/malfunctioning/defect of the B “Laser Unit” resulting in giving bad quality photo prints intermittently as opined by the duly licensed surveyor and loss assessor and hence such loss is not coming under the policy conditions (policy conditions vide Annexure-G).  The complainant had lodged a similar claim vide his letter dt.27.10.2009 but neither supplied any documents nor made any correspondence for which the said file was closed (copy of claim intimation dt.27.0.2009 is vide Annexure-H).
3. The licensed surveyor vide his affidavit dt.7.5.13 has intimated that he has deputed to conduct survey of the said machine on 8.4.10 and found that the machine was malfunctioning due to error in (B)  lue laser light source which affected the print quality of the machine some time but there was no breakdown of the machine.  During physical inspection and survey it was concluded that the defect developed in the machine does not form any indeminifiable loss in favour of the insured as they fall under clause-8 of general conditions of acceptance and clause-(b)(c((d)(e) of special exclusion section-1 of insurance policy.  The loss was assessed as Rs.1,94,980/- but the same was not payable as erosion of life occurred due to continual use and for fine  adjustment( i.e. running set up programme every time while starting the machine) made repeatedly  without diagnosing the actual problem in the said machine with the help of service engineers of Suppliers Company.  Thus the loss as alleged is concluded to be nothing but a defect.  During the survey it was found that the insured and his representative deliberately suppressed the fact that a very vital spare i.e. Driver P.C.B for laser light source was repaired one.  But due to development of frequent defect subsequently such unit was replaced by another reconditioned unit where the old unit was returned back to the repairing company without the knowledge of the insured.  This certainly violates the general condition of acceptance.  The minutes of discussion which was held between the representative of M/s. Noritsu India Pvt. Ltd. and the representative of M/s. Naidu Digital Photo Lab Ltd. was prepared by the surveyor Sri B.Mohanty.
4. Vide the counter affidavit dt.13.5.2015 the complainant has stated that the surveyor appointed by the O.Ps has got no technical qualification/knowledge with regard to error crept into the machine.  The surveyor has also not taken any assistance of technical expert who are well versed with mechanism of the photo processing unit.  The opinion of the surveyor that the erosion of life of the photo processing unit occurred due to continual usage is far from truth and the surveyor lacks basic idea about the highly sophisticated machine.  The complainant has not suppressed any material facts regarding repairing of P.C.B Driver and at the time of insuring the machine the O.Ps have duly verified the same after which cover note was issued.  Hence, the report of the surveyor should not be accepted.
5. We have gone through the case in details, perused minutely the documents as submitted by the complainant and as well as by O.Ps. , heard the learned advocates from both sides at length.  We have observed that the complainant had taken an Electronic Equipment insurance policy vide No.558490/44/09/58/30000016 with the O.Ps to cover the risk of equipments as described in schedule-1 of the policy.  The said policy was valid from dt.29.8.2009 to 28.8.2010.  On 31.3.2010 the complainant intimated O.P No.1 that Printer processor has suddenly stopped working since 31.3.2010 morning.  The complainant also requested O.P No.1 to depute the surveyor for inspection and to issue a claim form immediately.  Sri B.Mohanty,Suveyor was deputed for the purpose, who visited the site on 08.04.2010 and remarked in brief that the complaint against break down of the machine (stoppage of machine from performing all types of function) was not correct but the machine was manufacturing bad quality photographs  due to error in (B) lue laser light source.  Such error was affecting the print quality of photos printed by the machine.  Thus error is considered and concluded to be the defect developed in the machine and thus does not form any indemnnfiable loss in favour of the insured as they fall under clause no.8 of general condition of acceptance and clause No.(b)(c)(d)(e) of special exclusion section-1  of issued policy as per observation and conclusion. Clause No.8 of General condition says regarding fraudulent claims-“If a claim is in any respect fraudulent, or if any false declaration is made or used in support thereof, or if any fraudulent means or devices are used by the insured or anyone acting on his behalf to obtain any benefit under this policy, or if a claim is made and rejected and no action or suit is commenced within three months after such rejection or, in case of arbitration taking place as provided therein, within three months after the Arbitrator or Arbitrators or Umpire have made their award, all benefit under this Policy shall be forfeited” whereas special exclusion to section-1 says that the company shall not, however be liable for

(b) “Loss or damage caused by any faults or defects existing at the time of commencement of the present insurance within the knowledge of the insured, or his representatives, whether such faults or defects were known to the company or not;”

( c )” Loss or damage-as a direct consequence of the continual influence of operation (e.g wear and tear, cavitations, erosion, corrosion, incrustation) or of gradual deterioration due to atmospheric conditions;”

 

(d) “Any costs incurred in connection with the elimination of functional failures unless such failures were caused by an indemnifiable loss of or damage to the insured items;”

 

(e) “Any costs-incurred in connection with the maintenance of the insured items, such exclusion also applying to parts exchanged in the course of such maintenance operations”.

 

The surveyor of O.Ps opined that the cause of loss to the printer processor is a maintenance problem and not a breakdown or accident in nature.  Thus it is a non-payable claim.  It was observed from the minutes of meeting dt.08.04.2010 between M/s. Naidu Digital Photo Laps Pvt. Ltd. and M/s. Noritsu India Pvt. Ltd. that the complainant had the same problem on 29.03.2010.  As advised they run” set up programme” and the defect was rectified.  On 31.03.2010 the same problem was also found which could not be rectified.  M/s. Noritsu could identify the defect to be due to malfunctioning of laser unit and the complainant was advised to replace the said unit with a new one.  A new laser unit was replaced on 08.04.2010 by M/s. Noritsu and after test run, the machine started functioning in correct manner without any defect in photo prints.  The said machine was manufactured/purchased during the year 2005 and as on 31.3.2010 has already completed about five years.  The manufacturer i.e. M/s. Noritsu India Ltd. has also remarked the defect as “malfunctioning”.  It is a fact that the complainant has not agreed with the view of the surveyor but the complainant has not given any specific observation on the remark as given by the manufacturing company i.e. malfunctioning.  The complainant has also not suggested to check the machine through a group of specialists to find out whether the defect is due to break down or due to malfunctioning for maintenance problem/continual usage.

Basing on the facts and circumstances as stated above, we have observed that the machine was not in a breakdown/damage condition but the same is a case of malfunctioning of the laser unit which is not covered under the scope and ambit of the Electronic Equipment Insurance Policy rather is covered under exclusion clause of the said Insurance Policy.

Hon’ble Supreme Court of India in the case of Dr. B.S.Cauhan and V.Gopala Gowda  JJ, Export Credit Guarantee Corporation of India Ltd. Vrs. M/s. Garg Sons International has decided that “It is not permissible for the court to substitute the terms of the contract itself, under the garb of construing terms incorporated in the agreement of insurance.  No exceptions can be made on the ground of equity.  The liberal attitude adopted by the court by way of which it interferes in the terms of an insurance agreement, is not permitted.”  The same must certainly not be extended to the extent of substituting words that were never intended to form a part of the agreement” (2017(1) CPR 53(SC))

                                                                                            ORDER

Basing on the facts and circumstances as stated above and to meet the ends of justice, we have observed that the complainant failed to prove deficiency in service on the part of the O.Ps.  Hence the case is dismissed.

Typed to dictation, corrected and pronounced by the Hon’ble Member in the Open Court on this the 30^th day of May,2017 under the seal and signature of this Forum.

 

                                                                                                                                       (Sri B.N.Tripathy )

                                                                                                                                             Member.

 

 

                                                                                                                                          (   Sri D.C.Barik  )

                                                                                                                                             President.