This complaint coming up before us for hearing on 07-06-12               in the presence of Sri S.A. Shareef, advocate for complainant and of Sri S.A. Khadar, advocate for 1^st opposite party, Sri T. Bhair Raju, advocate for 2^nd opposite party and of Sri V. Mohan Srinivas, advocate for 3^rd opposite party,  upon perusing the material on record, after hearing both sides and having stood over till this day for consideration this Forum made the following:-

O R D E R

Per Sri A. Hazarath Rao,  President:-

        The complainant filed this complaint u/s 12 of the Consumer Protection Act seeking Rs.20,00,000/- towards damage of the excavator.

  2.  In brief the averments of the complaint are these:

        The complainant on 24-09-10 purchased L&T Komatsu excavator Sl.No.NL21728-DOL from the 2^nd opposite party and it was manufactured by the 3^rd opposite party.   The complainant insured the said excavator with the 1^st opposite party under policy bearing No.65/61011633/00025/10-11.   The said policy was valid from                24-09-10 to 23-09-11.  On 01-06-11 at about 11.30 am at the fields of one Bommisetty Suryanarayana of Karlapalem village the said excavator was completely damaged in accidental fire.  The S.H.O, Karlapalem PS registered the case as Cr.No.47/11 on giving report.   Due to damage the complainant lost earnings to a tune of Rs.5,00,000/- besides value of excavator i.e., Rs.28,09,960/-.  The complainant restricted his claim to Rs.20,00,000/- only in view of pecuniary jurisdiction of this Forum.   Being manufacturer and dealer, the opposite parties 2 and 3 are also liable.   The complainant approached the 1^st opposite party several times and requested him to pay the said amount.  But the 1^st opposite party have been postponing the same on some pretext or other.  The legal notice dated 19-07-11 also did not convince the 1^st opposite party.   The complaint therefore be allowed.

3.      The contention of the 1^st opposite party in brief is thus:

        The complainant insured his excavator under special contingency policy and the said policy was valid from 24-09-10 to 23-09-11.   Driver of the said excavator did not take precautionary methods to stop the engine when fire occurred and due to his negligence and inexperience the accident occurred.  As per terms and conditions of the policy the 1^st opposite party is not at all liable to pay damages.   The 1^st opposite party communicated its repudiation to the complainant and as such it did not commit any deficiency of service.  As the complainant was using excavator for business, he is not a consumer under the Consumer Protection Act.   Rest of the allegations contra mentioned in the complaint are all false and the complainant is put to strict proof of the same.   The complaint therefore be dismissed.

4.      The contention of the 2^nd opposite party in nutshell is thus:

        The 2^nd opposite party is not properly represented.  The                   2^nd opposite party is a partnership firm.  The complainant purchased M/s. L&T Komatsu excavator Sl.No.NL21728-DOL from the                          2^nd opposite party.  The 2^nd opposite party is not aware of damage to the said excavator in fire accident at Karlapalem.   The 2^nd opposite party never managed to get the legal notice returned.   Being an authorized service agent of L&T Komatsu Limited, the 2^nd opposite party rendered periodical services to the complainant as and when required.   The complainant unnecessarily made the 2^nd opposite party as party to have unlawful gain and the same may be dismissed.

5.      The contention of the 3^rd opposite party in short is hereunder:

        The complainant is not a consumer within the purview of Consumer Protection Act, as the complainant was using the excavator for commercial purpose.   The complaint is bad for non joinder of proper manufacturer.   The complainant purchased the said excavator under the loan agreement with M/s Tata Capital Limited who get the insurance interest over the said machine.   The complainant did not approach this Forum with the clean hands.   The 3^rd opposite party came to know about the insurance policy after receiving complaint copy.  The manufacturer of excavator L&T Komatsu Limited is an independent entity.  The 3^rd opposite party is not the manufacturer of the excavator.  The fire accident in which the machine got burnt cannot be due to any short circuit because fuses were insulated at the required areas to protect the electrical equipment and wiring from short circuits.  All the opening portions of the wiring were covered with fire resistant insulation to prevent electrical sparks due to loose or defective contact.  The complaint may be dismissed against the                  3^rd opposite party as it was unnecessarily added.

5.     Exs.A-1 to A-13, Exs.B-1 to B-5 and Ex.B-6 to B-15 were marked on behalf of complainant and opposite parties 1 and 3 respectively.

5.     Now the points for consideration in this complaint are:

1. Whether the complainant is a consumer within the purview of Consumer Protection Act?
2. Whether this Forum has jurisdiction to entertain the complaint?
3. Whether the complaint is bad for mis joinder of opposite parties 2 and 3?
4. Whether the 1^st opposite party committed deficiency of service?
5. Whether the complainant is entitled to Rs.20,00,000/- and                 if so from whom?
6. To what relief?

6.  POINT No.3:-   The complainant described the 3^rd opposite party as L&T Limited represented by its Manager, Vijayawada and contended that it manufactures excavators.  The complainant filed copy of invoice wherein the manufacturer was shown as L&T Komatsu Limited.  It can therefore be said that the 3^rd opposite party is not the manufacturer of the excavator purchased by the complainant under Ex.A-12.

7.     The 2^nd opposite party in its version contended that the complainant purchased L&T Komatsu excavator Sl.No.NL21728-DOL manufactured by M/s L&T Komatsu Limited. Under those circumstances describing the 2^nd opposite party as a proprietary concern does not affect the case.  It is not the case of the complainant that the excavator purchased by him on 24-09-10 under Ex.A-12 suffered from manufacturing defect.   Under those circumstances, the contention of the opposite parties 2 and 3 that they were unnecessarily made as parties to the complaint is having considerable force.   In the absence of contention of manufacturing defect, the opposite parties 2 and 3 cannot be made liable to answer the complainants claim.  Under those circumstances, the complaint is liable to be dismissed against the opposite parties 2 and 3.

8.     In view of the above findings, the documents marked as Exs.B-6 to B-15 and the decision relied on by the 3^rd opposite party mentioned infra:

        1.  In Mereck Limited vs. Hubli Diagnostics Medicare and                           Research Centre Private Limited (FA.No.364 of 2005);

        2.  In National Insurance Company Limited vs. Munir Shah in                     Revision Petition No.1 of 2001;

        3. In National Insurance Company Limited vs. Premjibhai                          Ranchhodbhai Hodar Mangrol Matsyagandha, Mangrol,                      revision petition No.124 & 125 of 1994;

        4. In Haji Bashir Ahmad vs. National Insurance, revision petition                        No.1335 of 2001;

        5. In Pawan Kumar vs. Spacetech Equipment and Structural (P)                         Limited, OP. No.6 of 1993;

        6. In Sitha Vedanayagam vs. New India Assurance Company                     Limited and others in FA.No.620 of 1992;

        7. In M/s Vikas Dall and General Mills vs. The Oriental Insurance                        Company Limited and another in OP.No.256 of 1992;

         need not be gone into.   We therefore answer these points in favour of opposite parties 2 and 3.

9.  POINTS 1 & 2:-   The complainant in para III (c) of his complaint averred that he lost earnings to a tune of Rs.5,00,000/-. It can therefore be inferred that the complainant purchased the excavator under Ex.A-12 for commercial purpose as rightly contended by the                          1^st opposite party.   Hiring of services for commercial purpose was excluded from the purview of Consumer Protection Act.    In this case, the complainant insured the vehicle against the loss/damage that may be occurred during the period of insurance as indemnity.   It is not the case of the 1^st opposite party that the complainant was engaged in business of insurance.   Under those circumstances, the contention of the opposite party is devoid of merit.   We therefore, answer this point in favour of complainant.

10.   POINTS 4 & 5:-   The complainant insuring the vehicle with the 1^st opposite party and the 1^st opposite party issuing insurance policy (Ex.A-2) is not disputed.  Likewise the excavator covered by Ex.A-12 and A-2 gutted in fire accident and the complainant giving report to Karlapalem Police (Ex.A-1).   The 1^st opposite party appointed a surveyor and who in turn submitted his report (Ex.B-1).   The                       1^st opposite party repudiated the claim basing upon the policy exceptions B (Ex.A-6).

11.   The Station Fire Officer, Bapatla issued certificate stating that complainants excavator while working in agricultural fields short circuit happened in electrical system and the machine was totally burnt (Ex.A-4).   Likewise the Tahsildar, Karlapalem gave a certificate     (Ex.A-5) on 08-06-11 stating that the excavator of the complainant was fully gutted in fire accident.  Both Exs.A-4 and A-5 did find place in the report of surveyor (Ex.B-2).   The surveyor on 20-08-11 under Ex.B-2 assessed the loss at Rs.17,52,500/-.   Again the same surveyor on 21-03-12 estimated the loss at Rs.10,04,375/- (Ex.B-5).

12.   The 1^st opposite party filed terms and conditions of special contingent policy along with policy (Ex.B-1) under which the complainant insured his excavator.   Clause B of exceptions enumerated under the said policy are as follows:

        “Loss or damage due to electrical or Mechanical breakdown, failure, breakage or derangement, freezing of coolant or other fluid, defective lubrication or lack of oil or coolant, but if as a consequence of such breakdown or derangement an accident occurs causing external damage, such consequential damage will be indemnifiable”.      

        It is quite apt to mention here that the complainant’s excavator was gutted to fire on 01-06-11 i.e., within nine months of purchase.

1. The learned surveyor did not consider the phrase mentioned in the policy exception B “But if as a consequence of such breakdown or derangement an accident occurs causing external damage, such consequential damage will be indemnifiable”  

The above clause in our considered view is ambiguous and as such advantage has to go to any insured being a beneficial legislation. In our considered opinion the opposite party did not consider the said clause in proper perspective and negatived the claim of the complainant in toto and it amounted to deficiency of service.

14.   The surveyor in his findings observed the following:

1. The survey was carried out on 02-06-11, at the agricultural fields of Mr. B. Satyanarayana, Yagili Village Karlapalem Mandal, Guntur district, AP, in presence of the insured Mr. M. Sambasiva Rao.
2. The machine was found totally in burnt condition.  The engine, radiator, connectors, oil tank, hydraulic tank, hoses were gutted due to fire.   The battery & their electric connecters are not recognizable, further the hood & hoses connected to Arm cylinder & Bucket cylinder were found damaged.
3. There were clear evidences that a massive fire occurred in the excavator particularly at the engine location.   The excavator was damaged extensively by fire.   Loose sand/mud was found all along with excavator, which was reportedly used in extinguishing the fire.
4. We would not find any external fire and there is no possibility of external fire as the excavator is in the mind of the agricultural fields.
5. According to the insured, they tried to put off the fire by using sand/mud.  Meanwhile the villagers informed the fire brigade, who have reached the spot and doused the fire; by the time the fire brigade attended the machine was totally burnt.
6. ……………
7. …………..

          8. On enquiry with the service engineer from M/s Mithra Earth Movers, (L&T) about the rectification works to be done, the service engineers informed that, going for repairing is not feasible as it costs more than the cost of a new excavator.  Copy of service report of M/s Mithra Earth Movers, Vijayawada Dt.02-06-11 is enclosed as a annexure”.

15.   In M/s Royal Sundaram Alliance Insurance Company Limited vs. M/s Shripant Motors & Ors., 2012 (2) CPR 329 it was held:

           “Moreover, in the present case, there was damage not to the part or parts of the insured vehicle but it was a case of total loss to the vehicle in the accident.   The vehicle in question was a new vehicle and it was not registered with the Regional Transport Office.   The said car was to be delivered to the Corporation Bank and if the Bank was to know that the car had suffered damage it would not come forward to purchase the same.  Under these circumstances, Respondent No.1 was entitled for compensation to the extent of entire value of the car.  Plea taken by the petitioner that it was liable to indemnify the expenses incurred for repair of the vehicle only, cannot be accepted.”

16.   In this case the complainant purchased the excavator under Ex.A12 on 24-09-10 and was using it till accident took place i.e., 01-06-11.   Under those circumstances, allowing depreciation of 10% from the value of the vehicle in our considered opinion will meet ends of justice.

17.   Clause (a ) of terms and conditions of the policy says that the excess stated in the schedule to be borne by the insured in any one occurrence; if more than one item is lost or damaged in occurrence, the insured shall not, however, be called upon to bear more than the highest single excess applicable to such items.

18.   In this case the entire excavator was gutted to fire. As mentioned in Clause (a ) of terms and conditions the 1^st opposite party is entitled to deduct Rs.30, 000/-.  Therefore the complainant is entitled to Rs.23,75,000/- (Being the insured value )–  Rs.2,37,500/-(depreciation @ 10%) = Rs.21,37,500 - Rs.30,000 = Rs.21,07,500/-).  

19.  Since the complainant restricted his claim to Rs.20,00,000/- awarding this sum in our considered opinion will meet ends of justice.  Therefore we answer this point in favour of the complainant.

20.  POINT No.6:-   In view of our findings, in the result the complaint is partly allowed as indicated below:

1. The 1^st opposite party is directed to pay Rs.20,00,000/- (Rupees twenty lakhs only) together with interest @9% p.a., from the date of order till payment.
2. The 1^st opposite party is directed to pay costs of Rs.2,000/- (Rupees two thousand only) to the complainant.
3. The claim against opposite parties 2 and 3 is dismissed with costs of Rs.2, 000/-  (Rupees two thousand only) each.
4. The above order shall be complied within a period of six weeks from the date of receipt of the copy of the order. 

Typed to my dictation by Junior Steno, corrected by me and pronounced in the open Forum dated this the 14^th day of June, 2012.

MEMBER                                             MEMBER                                             PRESIDENT

APPENDIX OF EVIDENCE

DOCUMENTS MARKED

For Complainant:

For 1^st opposite party: 

For 3^rd opposite party: 

                                                                                           PRESIDENT