This appeal has been filed by the appellant,   Remi Edilstahi Tabulars Ltd.  against the order 28.11.2014 passed by the State Consumer Disputes Redressal Commission, Maharashtra  (for short, State Commission) in CC No.  CC/09/58.

2.      Brief facts of the case are that appellant company is incorporated and registered under the Companies Act, 1956 and is part of the prestigious REMI Group of Companies and is engaged, inter alia, in the business of manufacturing, importing and exporting of stainless steel welded and seamless pipes of various sizes and grades.  In  the year 2002 the appellant had installed a windmill of 600 MW in the Brahmenwel region of Dhule District in Maharashtra. The appellant paid an amount of Rs.1,11,500/-    (plus service tax) as premium to the opposite party and the opposite party had issued Policy No 2006/32013460/IMB dated June 3, 2006.  On 15/16 Aug., 2006 at about midnight, the site in charge of the operation observed an abnormal sound and immediately stopped the windmill for inspection and upon inspection, found  that there was a machinery breakdown in the windmill since there was a breakdown in the gear box.  Appellant lodged a claim for Rs.49,50,000/- (being the estimated amount of loss due to the damage caused to the windmill) with the opposite party under the said policy. On 25.8.2006 the opposite party appointed Cunningham Lindsey International Pvt. Ltd. as a surveyor to carry out the survey.  On 29.3.2007  the opposite party repudiated  the claim of the appellant on the ground  that the claim allegedly fell under the special exclusion No.C which provided that loss or damage as a direct consequence of the continual influence of operation (e.g. wear and tear, cavitation, erosion, corrosion, incrustation) or of gradual deterioration due to atmospheric conditions would not be covered.  On 28.4.2007   the appellant vide its letter to the opposite party pointing out that there was no evidence to show that the loss was due to gradual wear and tear and that it was a clear and genuine case of machinery breakdown.  On 26.2.2009 the appellant received an email from the opposite party repudiating the claim on the completely baseless and flimsy ground  that the loss had occurred at the location which was not covered under the policy. On 26.3.2009,  the appellant filed complaint before the State Commission. On 28.11.2014 after hearing the parties the State Commission dismissed the complaint.

3.      Hence this appeal.

4.      Heard the learned counsel for the parties and perused the record. Learned counsel for the appellant/complainant stated that the State Commission has dismissed the complaint mainly on two grounds. First, the State Commission has accepted the report of the surveyor that the breakdown of the gear box of the windmill is the result of normal wear and tear due to continuous use and therefore, the case is covered under Exclusion Clause 5 of the policy. Secondly, the State Commission has also agreed with the assertion of the insurance company given in their e-mail repudiating the claim on 26.2.2009 that the risk location given in the policy does not tally with the location of the damaged machine. First of all, the learned counsel argued that initially the complainant represented against the first repudiation letter dated 29.3.2007 and the insurance company agreed to reconsider the claim but finally repudiated on 26.2.2009 by taking  totally different stand that the damaged property was not covered under the risk location given in the policy. In this respect, the first repudiation letter becomes redundant and objection raised by the surveyor from the insurance company becomes meaningless because the insurance company has finally  repudiated the claim on a different ground.  It was further argued by the learned counsel that the surveyor has not given any reasoning behind his thinking that the breakdown may be due to normal wear and tear. It was argued that the breakdown was sudden  and it has been supported by the affidavit of the company which ultimately repaired the gear box. Learned counsel referred to the affidavit filed by Mr. Borkatte G. Pati, Officer of Elecon Engineering Company Ltd.  filed in March, 2010 wherein the following has been stated:

“At the outset I say that I am firmly of the opinion that the damage to the Gear Box has not been caused due to normal wear and tear. On inspecting the damaged gear box of the windmill I found that the bearings in the gear box were badly damaged. I say that having assessed the damaged gear box I am of the view that normal wear and tear could not be the cause of its breakdown.”

5.      Coming to the second objection of the insurance company in respect of the risk location, the learned counsel for the appellant stated that due to typographical mistake in the policy, the place has been mentioned as ‘Sarkarvel’ Dhule, District Maharashtra instead of ‘Brahmanval’ area. This risk location of ‘Sarkarvel’ was also recorded in the previous policy and a claim of Rs.77,179/- has been approved by the insurance company and paid on 10.8.2006 and the claim number was 32004503. Thus, it is clear that  this objection has been raised only to deny the claim and the insurance company is fully aware that there is no place like ‘Sarkarvel’ and the complainant has also given affidavit in this regard that no such place exists. The insurance company has not filed any proof that there is some other windmill insured at Sarkarvel or there is any place like ‘Sarkarvel. Therefore, the only windmill is at  ‘Brahmanvel’ for which the claim has been lodged.  It is also not clear that at what stage the typographical error has occurred. The State Commission had asked both parties to file the copy of the proposal form. Obviously, the proposal form was submitted to the insurance company and therefore, there was no question of producing any proposal form from the side of the complainant, however, it is surprising that even the insurance company did not file the proposal form. Therefore, it cannot be ascertained as to which place was filled in the proposal form and whether the mistake has occurred at  the level of the complainant or by the insurance company. Prima facie, no intention can be attributed to the complainant for giving a wrong place for risk location. As the proposal form has not been filed, it cannot be said that the mistake has occurred from the side of the complainant. Learned counsel for the appellant stated that the State Commission has relied upon the assertion of the OP that if there was some mistake in the risk location, the appellant could have returned the policy under on the ‘Free-look period of 15 days”.  The policy was not minutely examined by the complainant and was accepted as such and particularly in the light of the fact that no such objection was raised by the insurance company on the previous claims which in fact was later on paid by the insurance company. On the basis of a typographical apparent error, the claim cannot be dismissed. Learned counsel for the appellant relied on the following judgement to support his assertion :

“Baljeet Vs. United India Insurance Company Ltd., R.P. No.454 of 2013 decided on 2.12.2013 by this Commission, wherein it has been held:

“In the written statement, opposite party has tried to justify the repudiation on the ground that intimation of theft was given to the insurance company after a gap of three months. No doubt in para 3 of the complaint, it is alleged that theft took place on the intervening night of 26^th June, 2010 and the FIR was registered at P.S. Gautam Budh Nagar on 27^th October, 2010. However, on perusal of the copy of the FIR  filed on record, we find that it is a typographical error. The FIR was actually registered at P.S. Gautam Budh Nagar on 27^th June, 2010 and not on 27^th October, 2010. Learned counsel for the petitioner opposite party has failed to point out any evidence which would show that intimation regarding theft of vehicle was not given to the insurance company.”

6.      On the other hand, learned counsel for the respondent/OP insurance company stated that the surveyor has given its final report on 28.3.2007 wherein he has categorically recommended that claim is not payable as the present breakdown is covered under the normal wear and tear. He has examined different parts of the gear box and has given his opinion.  On the basis of this examination, he has come to the conclusion that the breakdown was not sudden and it was due to long use and due to wear and tear. The learned counsel pointed out the Exclusion Clauses 4 & 5, which read as under:

“4.  Gradually developing flaws, defects, tracks or partial fractures in any part not necessitating immediate stoppage, although at some future time  repair or renewal of the parts affected may be necessary.

5.    Deterioration of or wearing away or wearing out any part of any machine caused by or naturally resulting from normal use or exposure.”

7.      Based on the above exclusion clauses, the claim was repudiated vide letter dated 29.3.2007. However, on the representation of the complainant, the matter was again looked into by the insurance company and it was found that the risk location given in the policy did not match with the site of the machinery damaged. As the policy is a commercial contract between the insured and the insurer, it has to be strictly interpreted in terms of its language mentioned in the contract. Risk location is a very important aspect and cannot be over-looked. It is true that a sum of Rs.77,179/- was paid as insurance claim to the appellant/complainant  on the basis of the policy which also had the same risk location but the insurance company had not objected at that time on the ground of location because the amount was not very high and the State Commission has accordingly observed this fact and has not conceded to the contention of the complainant in this regard. The learned counsel for the insurance company further stated that the surveyor has examined the actual gear box of the windmill and in the details of the gear box, the surveyor has mentioned its Sl. No. as 18726. Similarly, in other correspondence also, for example in the letter dated 22.8.2006 of GEF Energy, it  has mentioned gear box Sl. No.18726.  Even in the affidavit of Mr. Borkatte G. Pati  in para 5, it is clearly mentioned that the gear box that is repaired has Sl. No. 18726. It was further stated by the learned counsel that Sl. No. of the gear box written in the schedule of policy is 18754. This means that the damaged gear box is not the same which is insured. In this regard, the learned counsel for the complainant stated that the issue of Sl. No. of gear box was never raised before the State Commission and therefore, it cannot be raised before this Commission.  Moreover, the learned counsel for the complainant also raised a point that report of the surveyor then cannot be accepted because it relates to same other gear box and not gear box that has been damaged under this claim as has been lodged under the policy.  Learned counsel for the respondent argued that generally what has come in the proposal form,  the same is accepted by the insurance company and even if there was some mistake on the part of the insurance company in filling up the risk location in the policy, the complainant was at liberty to return the policy within “Free-look period of 15 days”. the complainant has failed in this regard and cannot claim any mistake in  the policy later on when the incident has happened. The State Commission has agreed with this point of view.   Learned counsel for the respondent has relied upon the judgments of the Hon’ble Supreme Court in Swaran Singh Vs. State of Punjab, (2000) 5 Supreme Court Cases 668.

8.      On the issue of free-look period, learned counsel relied upon the judgment of  Om Parkash Gagneja  Vs. Aegon Religare Life Insurance Company Ld., FA No. 405 of 2013, decided on 19.9.20-13 by this Commission, wherein it has been held:

“It was denied that the complainant ever approached opposite party nos.1 and 2 with any grievance, that the information incorporated in the proposal form was incorrect. It was further admitted that the complainant made representation, for refund of premium, only after the expiry of free-look period. It was further stated that, as per the terms and conditions of the Policy, no cancellation of the same, could be made, after the expiry of free-look period.”

9.      I have given a thoughtful consideration to the arguments advanced by both the learned counsel for the parties and have examined the material on record. So far as the first question relating to wear and tear of the gear box is concerned, the surveyor in his  report has not given the time period since the gear box was in use and what is an average life of gear box.  Without  these two parameters, it is difficult to reach to any conclusion regarding breakdown due to wear and tear. The company which has repaired the gear box has clearly stated on oath that the breakdown of gear box was not due to normal wear and tear.  Thus, prima facie the complainant  appears to be having some case on merits as break down due to wear and tear is not completely borne out from the record and evidence. Even if one leaves this question of break down due to wear and tear, the major question in the present case is in respect of risk location and the Sl. No. of the gear box.  It is true that the risk location is same as was given in the previous policy and a claim was also approved by the insurance company for that year and no objection in respect of the risk location was raised by the insurance company at that time.      

10.    There are number of judgments of the Hon’ble Supreme Court where it has been held that contents of insurance are to be construed in the same way in which they are expressed.  Courts have not been given liberty to interpret the contract terms in their own way. In this regard, I would like to rely upon the following judgments :

(a) In General Assurance Society Ltd. Vs.Chandmull Jain, [1966 ]3SCR 500, it was held as under:-

17.” …In interpreting documents relating to a contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves.”

(b) in Oriental Insurance Co. Ltd. Vs. Sony Cherian II(1999) CPJ 13 (SC ), it has been observed as follows:-

“16. The insurance policy between the insurer and the insured represents a contract between the parties. Since the insurer undertakes to compensate the loss suffered by the insured on account of risks covered by the insurance policy, the terms of the agreement have to be strictly construed to determine the extent of liability of the insurer. The insured cannot claim anything more than what is covered by the insurance policy. That being so, the insured has also to act strictly in accordance with the statutory limitations or terms of the policy expressly set out therein.”

(c) United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal, (2004) 8 SCC 644, the Hon’ble Apex Court held as follows:-

“6. ….The terms of the policy have to be construed as it is and we cannot add or subtract something: Howsoever liberally we may construe the policy but we cannot take liberalism to the extent of substituting the words which are not intended.

9. …It is settled law that terms of the policy shall govern the contract between the parties, they have to abide by the definition given therein and all those expressions appearing in the policy should be interpreted with reference to the terms of policy and not with reference to the definition given in other laws. It is a matter of contract and in terms of the contract the relation of the parties shall abide and it is presumed that when the parties have entered into a contract of insurance with their eyes wide open, they cannot rely on definition given in other enactment.

14. Therefore, it is settled law that the terms of the contract has to be strictly read and natural meaning be given to it. No outside aid should be sought unless the meaning is ambiguous.”

11.    In the facts and circumstances of the case, the appellant/complainant could have a case if it was proved that it is the same gear box which is covered under the policy and that has been damaged and has been repaired. The policy schedule clearly states that the Sl. No. of gear box is 18754, whereas the surveyor has mentioned in the details of gear box as Sl. No.18726.  The letter from GE India Industrial Pvt. Ltd. also mentioned Sl. No.18726. Even the affidavit filed by  Mr. Borkatte G. Pati also mentioned in para no.5 as the gear box having been repaired  as having Sl. No.18726. This creates a doubt  as to whether the repaired gear box is same as insured under the policy or it is different gear box altogether. It is true that this issue was not raised by the insurance company before the State Commission. However, this is a serious discrepancy and cannot be ignored even at the appellate stage.  Thus, prima facie, two aspects of risk location and Sl. No. of the gear box as mentioned in the policy do not match with the actual risk location and Sl. No. of  the damaged gear box. Clearly, with two serious discrepancies, relying upon the above mentioned authoritative pronouncements of the Hon’ble Supreme Court, I am of the view that the claim of the complainant cannot be considered for indemnification. However, it is also true that due to non production of proposal form by the insurance company, it could not be verified whether the complainant had given the correct address of risk location and the correct Sl. No. of the gear box in the proposal form or not. Clearly the appellant had a chance to return the policy had he noticed and verified the risk location and sl. No. of the gear box mentioned in  the policy within the free-look period of 15 days. He did not avail this opportunity as he was confident that the policy must be correct because he got a claim approved by the insurance company on the basis of exactly the same policy of the previous year. However, as complainant has not taken any objection to the insurance policy in respect of the risk location and the Sl. No. of  the gear box, the same cannot be raised after the incident of damage or breakdown of gear box but this does not lessen the deficiency on the part of the insurance company that the insurance company has failed to produce the proposal form with a view to verify the proposal of the complainant. Obviously, had the insurance company produced the proposal form and if proposal form was found to be correct, then the complainant would have been entitled to more claim. Thus, it is a clear deficiency on the part of the insurance company. The complainant is definitely entitled to compensation from the insurance company for this deficiency in service in the facts and circumstances of the case.

12.    In the facts and circumstances of the case, I deem it appropriate to award a compensation of Rs.7,00,000/- (Rupees seven  lakhs only)  to the complainant to be paid by  the insurance company within a period of 45 days from  the  receipt of the copy of this order, failing which the insurance company shall be liable to pay interest @ 9% p.a. on this amount from the date of this order till actual payment. The First Appeal No.179 of 2015 is accordingly disposed of in terms of the this order.

13.    No order as to cost for this appeal.