Kerala

StateCommission

CC/15/6

m/s g k granites - Complainant(s)

Versus

divisional office oriental insurance company - Opp.Party(s)

jose abraham

07 Jan 2019

ORDER

 

 

 

KERALA STATE CONSUMER DISPUTES REDRESSAL

 

COMMISSION  VAZHUTHACAUD, THIRUVANANTHAPURAM

 

CC. NO.06/2015

 

  JUDGMENT DATED: 07-01- 2019

 

PRESENT : 

 

HON’BLE JUSTICE S.S. SATHEESACHANDRAN  : PRESIDENT

 

SHRI. RANJIT.R                                                                  : MEMBER

 

 

M/s G.K. Granites,

Oorakkad, Kizhakkambalam P.O,

Ernakulam District-680 562.                                     : COMPLAINANT

 

(By Adv: Sri. Jose Abraham & Vishnu Thampi)

 

            Vs.

 

1. Oriental Insurance Company Ltd.,

Divisional Office, Tripunithura,

Plakkat Building, Market Junction,

Tripunithura P.O, Ernakulam Dist.,

Cochin-682 301.

 

2. Chief Manager,

Customer Service Department,

Oriental Insurance Company Ltd.,

Oriental House, A-25/27, Asaf Ali Road,                             : OPPOSITE PARTIES

New Delhi-110 002.

 

(By Adv: Sri. Saji Isaac K.J )

 

3. Kamaz Vectra Motors Ltd.,

7 & 8 Sipcot Industrial Area, Phase-1,

Hosur, Tamil Nadu-635 126,

R/by its Managing Director.

 

 

 

 

 

                                                                               

                                                JUDGMENT

 

HON’BLE JUSTICE S.S.SATHEESACHANDRAN – PRESIDENT

 

          Complaint filed u/s 17 of the Consumer Protection Act.  Complainant is a partnership firm engaged in the business of  production, supply and distribution of aggregates of various specifications in large scale in the construction industry to the huge construction companies in and around State of Kerala.  Complainant has been doing the above business for the last more than 25 years and is possessed of more than 250 vehicles including heavy machineries, all of them insured with first opposite party.  Second opposite party is the Chief Manager of the first opposite party.  3^rd opposite party is the manufacturer of Kamas Vectra tippers, a Russian made heavy duty lorry.  On the persuation of agents of 3^rd opposite party, complainant purchased six Kamas Vectra tippers paying  price of Rs.30,00,000/- (Rs. Thirty lakhs) for each of them.  Purchase was made with the financial assistance from its bank hypothecating the vehicles.  The rate of interest for the loan was charged at 10.96% per annum.  Complainant availed service  of first opposite party to get insurance cover for the six vehicles and thereupon policies were issued under GCCB Public Carriers Policy – Zen C on payment of  total premium of Rs.50,983/- for each vehicle.  Insurance cover was for Rs.30,00,000/- (Rs.Thirty lakhs) for each vehicle.  Period of validity is from the midnight of  4.2.2011 to 4.2.2012.  One among the insured vehicles bearing registration No.KL-14-D-9144 accidently hit against another motor vehicle on 17.02.2011, i.e. within two weeks from its purchase. That vehicle was insured with the first opposite party under policy No.441800/31/2011/64828 dated 14.2.2011 and it was a bumper to bumper policy.  The vehicle at the time of accident possessed a valid permit and it was driven by a qualified driver having valid licence and badge.  Though the vehicle was provided with 12 months warranty 3^rd opposite party failed to rectify the damages due to lack of spare parts, which are not available in India but have to be imported from Russia.  Opposite party had taken more than 4 months to give a detailed estimate for repairing the vehicle for a sum of Rs,19,06,951/04.  Complainant was ready and willing to repair the vehicle claiming insurance, but 3^rd opposite party was not in a position to proceed with the repair due to lack of spare parts.  A revised estimate for Rs.2134165/83 was prepared and sent to first opposite party since spare parts by shipment from Russia had to be obtained.  On account of delay in the repair, complainant suffered heavy loss over and above the payment of interest on the loan availed to purchase the vehicle from its bank.  Since his loss was mounting day by day he requested the first opposite party-insurer  to settle the claim as cash loss.  Much later the insurer directed the complainant to produce  no objection certificate from the financier to forward his claim to its Regional office for settlement knowing fully well No Objection Certificate will not be issued by financiers without closing the account paying the dues.  Persistant demands by complainant to settle its claim were responded by the insurer with promises of positive solution.  Still the claim was not settled and hence the complaint is filed against first and second opposite parties imputing

 

deficiency in service to claim compensation of Rs.30,00,000/- (Rs. Thirty Lakhs).  Another sum of Rs.30,50,000/- as due in liquidation of vehicle loan to the financier, and, sum of Rs.18,00,000/-(Rupees Eighteen lakhs), the expenditure incurred for  other tippers for conducting his business are also claimed. During the entire period after the accident the tipper remained idle and not roadworthy.  The above sums are claimed with interest at 12% per annum over and above claiming the cost of the proceedings as well.  As against the 3^rd opposite party no claim is made by complainant stating that it has been impleaded as a formal party in the proceedings, but, with a statement that it is reserving its right to proceed against that opposite party in appropriate proceedings.

          2.  First and second opposite parties alone contested the proceedings filing their version jointly.  Maintainability of complaint was challenged by these opposite parties contending that the complainant-firm is not a consumer and that it is operating a good number of vehicles for its business in production and supply of aggregates to public.  The vehicle involved in the complaint was also purchased for its commercial purpose and complainant had been using it for its commercial purpose.  The insurance policy obtained by the complainant was part and parcel of its commercial purpose, to carry out its business activities and it cannot ply that vehicle on public road without such policy.  The non- repair of the vehicle after the incident was solely due to the default and negligence of 3^rd opposite party.  Despite the surveyor of company issuing direction to complainant and 3^rd opposite party to dismantle and repair  the

 

vehicle as early as on 22.3.2011 the repairs were not carried out.  Policy issued for the vehicle involved was not a bumper to bumper policy.  Engine number of the lorry with registration number KL-40-B-9144 is 92546260 and not 92548260 as stated in the policy and as such, according to these opposite parties, the vehicle with registration number KL-40-B-9144 had no valid policy. While admitting the accident involving the vehicle on 17.2.2011 it is contended that the vehicle was in a repairable condition.  Claim form with estimate for repair was submitted to first opposite party only on 5.7.2011.  A spot survey was done the next day after the accident itself, and, surveyor had also assessed damages on 17.3.2011 and submitted a preliminary report.  Surveyor had issued directions to Complainant and 3^rd opposite party to dismantle and repair the vehicle as on 22.3.2011.  Subsequently he issued a registered letter also to complete the repair.   Still, the repairs were not carried out by 3^rd opposite party stating that shipment containing spare parts is yet to arrive to carry out the repair.  Estimates prepared by 3^rd opposite party for repair are incorrect and imaginary and it has not imported any spare parts and not carried out any repair over the vehicle.  3^rd opposite party alone is culpable for the delay in settlement of the claim.  Complainant’s case for settling the claim on cash loss basis has no merit as the vehicle was in a repairable condition. Still the first opposite party got loss assessed by the surveyor on cash loss basis and recommended for settlement of the claim subject to production of N.O.C from the financier of the vehicle. Complainant demanded payment of the settlement amount directly to  

 

it undertaking to produce no objection certificate from the financiers.  However it did not produce the N.O.C.  There was no default and deficiency in service on the part of these opposite parties and they were prepared to settle the claim on cash loss basis though the vehicle was in a repairable condition to maintain good relations with the complainant.  Such settlement could not be given effect to since the complainant failed to produce the NOC from the financier of the vehicle.  Disputing the various claims raised in the petition as baseless and unsustainable these opposite parties sought for dismissal of the complaint.

          3.  The evidence in the case consisted of the testimonies of PW.1 and PW.2 and Exts.A1 toA18 for the complainant and testimonies of DWs 1 to 3 and Exts.B1 to B12 on the side of opposite parties 1 and 2.  At the instance of complainant, documents relating to settlement of claim over vehicle on cash loss basis with another insurance company and also account statement of the financier with respect to the vehicle involved in the proceedings were summoned, and photo copies of such documents after verification with originals were exhibited in evidence as Exts.X1 and X2 respectively.

          4.  We heard the counsel on both sides.

          5.  The following points emerge for consideration:-

                   (1)  Whether Complainant is a consumer as covered by the Act,                           and has the Commission jurisdiction to entertain the               

 

 

                         

  complaint imputing deficiency in service by the insurance                     company over its insured vehicle?

                   (2)  Have opposite parties 1 and 2 committed deficiency in service                        in not settling the claim of complainant over its insured                                   vehicle?

                   (3)  What reliefs, if any, allowable to the complainant, and if                                   so, from whom?

          6.      We heard the counsel on both sides and perused the records.

          7.  Point No.(1):-  Complainant is not a consumer as defined under the Act and the complaint alleging deficiency in service against opposite parties 1 and 2, Insurance Company, is not entertainable before this Commission, according to these opposite parties.  A preliminary objection on considering the maintainability of the complaint on the challenge of opposite parties is raised by the learned counsel for complainant submitting that previously this Commission had passed an order that the complaint is maintainable and since it has no power to review that Order  on maintainability that has to be treated as final and conclusive.  Learned counsel has relied on the Order dated 29.01.2002 in  Sehamalpur Cold Storage, Kazisarai, Varanasi (U.P.)  V. State of U.P. and Ors (Miscellaneous Patition No.26/1999 in Original Petitiion No.291/1993) by the National Consumer Disputes Redressal Commission, New Delhi to buttress his submission that re-examining of question of maintainability of the complaint is barred as the Commission has no power to review its previous Order on maintainability.

          8.  Perusing the order sheet we find that before recording of evidence, after hearing the counsel on both sides, Commission has passed Order dated 10.08.2016 that the complaint is maintainable without expressing anything more.  That one line Order passed by the Commission is now pressed into service by the learned counsel appearing for complainant to urge that we cannot examine the question of maintainability of the complaint again as it would amount to exercise of power of review which Commission is not empowered with.  An order stating that the complaint is maintainable passed during the pendency of proceedings that too without expressing anything more or appreciating the challenge over maintainability would no way preclude the Commission from examining the entertainability of complaint where a challenge is raised over its jurisdiction disputing the status of complainant as a consumer under the Act.  A question of jurisdiction needless to be pointed out can be raised at any stage including the stage of execution of a decree or order if it was rendered by any incompetent court or authority.  We find that question of jurisdiction involved which has been raised specifically by opposite parties disputing the status of complainant as a consumer under the Act has not been considered or looked into by the Commission while passing the Order that complaint is maintainable.  The fact that such Order was passed after hearing the counsel for parties would no way interdict the Commission from examining

the question of its jurisdiction to entertain the complaint.  The previous order passed by the Commission over the maintainability of the complaint without examining the question of its jurisdiction with reference to the status of complainant as a consumer as claimed by him to file the complaint will no way stand in the way to examine its jurisdiction to entertain the complaint. Such exercise even assuming that there is a previous order was passed on maintainability as such in the proceedings  would not take away the power of the commission to examine its jurisdiction where  serious disputes thereto are raised subsequently as it is not empowered to entertain and decide a complaint over which it has no jurisdiction.  Any order passed by the Commission without jurisdiction is a nullity and not enforceable.  Such being the position of law we find that there is no merit in the preliminary objection raised by counsel for complainant that the question of jurisdiction raised cannot be considered at this stage in view of the previous order on maintainability.  The decision relied by the counsel has no applicability in the present case and it is seen that it was rendered by National Commission at a time under a different context and also when it did not enjoy power of review.  No question of jurisdiction was also involved in that case.  Suffice to state the preliminary objection canvassed by the counsel for complainant opposing the examination of jurisdiction of the Commission to entertain the complaint is unworthy of any merit.

          9.  Complainant is a registered partnership firm and it is represented in the complaint by its Managing partner.  The firm is conceded by engaged in the

 

business of production, supply and time bound distribution of aggregates of various specification in large scale in the construction industry, to the huge construction companies in an around of State of Kerala. To carry out the business of the complainant it has a fleet of  vehicles numbering about 250 including heavy machineries and, according to the complainant, all of them are insured with the first opposite party. Complainant purchased six Kama Vectra tippers manufactured by the 3^rd opposite party with financial assistance obtained by loan for its commercial purpose and all of them were insured with first opposite party.  One of the above vehicles got involved in an accident with another vehicle and sustained damages.  Claim of compensation under the policy for the vehicle raised before the Insurance Company could not be processed with as the 3^rd opposite party failed to get the required spare parts for repair which were to be imported from Russia and not available in India.  In view of the long delay in getting the spare parts for repair and the vehicle being kept idle after the accident complainant moved for settlement of the claim by the Insurance Company on cash loss basis, which was agreed to and processed by the Company, but, insisting for production of no objection certificate from the financier to which the vehicle was hypothecated as security for the loan obtained.  Questioning the demand of the insurance company for no objection certificate of the vehicle from the financier, complaint has been filed alleging deficiency in service against the Company to claim compensation, reserving the right of complainant to proceed against the 3rd opposite party before the appropriate forum as provided by law.  On the above said allegations presented by the complainant the question emerges for consideration whether complainant is a consumer as defined u/s 2(1)(d) of the Act.

          10.  Section 2(1)(d) of the Act reads thus:-

                   “(d)  “consumer” means any person who –

1.  Buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is  made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
2.  (hires or avails of) any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who (hires or avails of) the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services availed of with the approval of the first mentioned person (but does not include a person who avails of such services for any commercial purpose):
3. .- For the purpose of this clause, “commercial purpose” does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment);”

Complainant, a registered firm, admittedly, is carrying a business and for its commercial purposes it has purchased the vehicle covered by the complainant, to transport its goods to customers.  The insurance cover obtained over the vehicle cannot be treated as one for commercial purpose is the argument of learned counsel for the complainant to contend that so far as the claim for compensation imputing deficiency in service against the insurance company which had indemnified the loss arising out of use of the vehicle insured, but failed to honour it, complainant has the status of a consumer and it is perfectly entitled to prosecute such a complaint before this Commission.  Learned counsel has relied on Order dated 3.12.2004 of National Consumer Disputes Redressal Commission, New Delhi in  Harsolia Motors V. National Insurance Company Limited to contend that availing of insurance service for the vehicle from insurance company cannot be treated as a commercial purpose.

          11.  We do not find any merit in the submissions made by the counsel that the service availed by complainant from the insurance company to insure its transport vehicles including the vehicle involved in the case and also the heavy machineries engaged for carrying out its business is not obtained for any commercial purpose. First and foremost it has to be noted that the complainant a registered firm is engaged in a commercial venture of production, supply and distribution of aggregates of various specifications in large scale to the huge construction companies in and around the State of Kerala and for that commercial purpose it has a fleet of 250 vehicles.  Admittedly the vehicle involved in the accident, one among them, had been purchased and used for transporting goods to its customers.  The vehicle involved is a public career and in terms of the mandate under the Motor Vehicle Act it cannot be used on public road without obtaining insurance policy as stipulated and subject to the conditions covered by the Act and also the policy issued for such vehicle.  When a public career vehicle of the complainant engaged for its commercial purpose sustained any damages or loss in an accident is it  open to the complainant, a registered firm carrying  business, to approach the Commission and claim compensation from the insurer of that vehicle imputing deficiency in service on the premise  it is a consumer as under the Act is the question arising for consideration.    In Laxmi Engineering Works V. P.S.G. Industrial Institute

 (AIR 1995 Supreme Court 1428)  the apex court analysing the ambit and scope of consumer as defined u/s 2(1)(d) of the Act has considered the impact of ‘Explanation’ added to the definition and also what is meant by commercial purpose as well.  Pointing out that a firm, registered or not, can claim the status of a consumer by virtue of the inclusive definition of  “person” in Section 2(m) of the Act the apex court has observed that explanation added u/s 2(1)(d) of the Act is applicable the members of the firm themselves ply, operate or use of goods purchased by way of self employment to eke out their livelihood.   Similar is the case where the firm obtains service from another for carrying on its business.  Where services are obtained by a firm for its commercial purposes and its case does not fall under the explanation added to Section 2(1)(d) of the Act it cannot claim the status of a consumer.  The vehicle involved, a public career, was engaged in the commercial activities of the complainant-firm and for its use on a public road an insurance cover was required as prescribed by the mandate of Motor Vehicles Act necessarily has to be taken note of in considering whether obtaining of policy has a nexus with the direct commercial activity of the firm, for the purpose of making profit.  The decision rendered in  ‘Harsolia Motors case’ relied by the counsel that a person who  takes insurance policy to cover the envisaged risk does not take policy for commercial purpose has no application to a case of this nature where the insurance policy was required to be taken by the mandatory  statutory prescription interdicting the use of  career without obtaining of insurance policy.  Moreover the vehicle, public career, was purchased and used for commercial activities the complainant, a registered firm, and it has no case under by the explanation added to Section 2(1)(d) to claim the status of a consumer.  We hold that the complainant is not a consumer and its complaint alleging deficiency in service against the insurance company is not entertainable before this Commission.  Point found accordingly.

          12.  Point Nos. (2) and (3):- In the light of the finding made as above, these points do not arise for consideration.

          In the result, complaint is dismissed directing both sides to suffer their respective costs.

 

          JUSTICE S.S. SATHEESACHANDRAN  : PRESIDENT

 

 

 

RANJIT.R : MEMBER

 

APPENDIX

COMPLAINANT’S WITNESS

PW1  :  Sri. George Antony

PW2  : Sri. Antony

COMPLAINANT’S EXHIBITS

Ext.A1         : Copy of Registration Extract.

Ext.A2         : Motor Insurance Certificate cum Policy Schedule of Lorry No.KL-40 D 9144.

Ext.A3         : Copy of quotation.

Ext.A4         :  General Dairy Extract dtd:17.2.2011 of Kunnathunadu Police Station.

Ext.A5         : Copy of estimate given to complainant by 3^rd OP.

Ext.A6         : Copy of e-mail of Ext.A5  sent to OPs 1 and 2.

Ext.A7         : Copy of letters sent to 3^rd OP, dtd:8.2.12, 15.5.12 & 12.12.12.

Ext.A8         :Letter sent by complainant dtd:22.3.2013 to 1^st OP.

Ext.A9         : E-mail dtd:22.4.2013 sent by complainant to 1^st OP.

Ext.A10       : E-mail dtd:29.5.2013 sent by 1^st OP to complainant.

Ext.A11       : E-mail dtd:10.2.2014 sent by complainant to 1^st OP.

Ext.A12       : E-mail dtd:11.02.2014 sent by 1^st OP to complainant.

Ext.A13       : E-mail dtd:16.9.2014 sent by complainant to 2^nd  OP.

Ext.A14       : E-mail dtd:16.9.2014 sent by complainant to 1^st   OP’s General Manager.

Ext.A15       : Copy of total cash loss settlement.

Ext.A16       : Present photograph of the vehicle.

Ext.A17       : Statement of Account of  Kotak Mahndra Bank.

Ext.A18       : Calculation statement of rent of the vehicle.

 

OPPOSITE PARTIES WITNESS

DW1           : Sri. Paul David

DW2           : Sri. Abdul Assess V.A.

DW3           : Sri. O.A. Santhosh

 

OPPOSITE PARTIES EXHIBITS

Ext.B1         : Letter dtd:23.6.2011 sent by surveyor, P.A. Santhosh.

Ext.B2         : Letter dtd:09.01.12 sent y the 1^st OP to complainant.

Ext.B3         : Letter dtd:31.1.12 sent by the complainant to the 1^st OP.

Ext.B4         : Letter dtd:7.3.12 sent by the 1^st OP to complainant.

Ext.B5         : Letter dtd:15.11.12 sent by the 1^st OP to complainant.

Ext.B6         : Letter dtd:24.5.13 sent by the complainant to 1^st OP.

Ext.B7         : Letter dtd:31.5.13 sent by the 1^st Op to complainant.

Ext.B8         : Certified true copy of the policy with terms and conditions.

Ext.B9         : True copy of the spot survey report.

Ext.B10       : True copy of claim form.

Ext.B11       : True copy of preliminary survey report dtd:27.7.2011.

Ext.B12       : True copy of final survey report.

 

Ext.X1         : Photocopies of documents and verification with originals.

Ext.X2         :  -do-    -do-

 

 

JUSTICE S.S. SATHEESACHANDRAN  : PRESIDENT

 

 

 

RANJIT.R : MEMBER

 

VL.