Sri. G.V.Balasubramanya,<br /> Member,<br /> <br /> 1. The complainant insured his computer and accessories like the printer and U.P.S with the opposite party. The insurance was done through the Punjab National Bank. The opposite party collected Rs.4363/- and Rs.4487/- as premium for two years from 24.7.2002 to 23.7.2004. <br /> <br /> 2. The complainant submitted a letter on 11.4.2003 to the opposite party to collect the premium on the depreciated value of the computer. There was no response from the opposite party.<br /> <br /> 3. On 16.6.2004 the computer and accessories broke down due to high voltage. The complainant brought this matter to the notice of the opposite party on 17.6.2004. After about 15 days of lodging the claim one Shri.Monappa Kottary, a surveyor of the opposite party inspected the complainant’s office and took photographs of the equipments.<br /> <br /> 4. Despite several telephone calls and personal enquiries, the opposite party did not settle the claim. In order to carry on his business the complainant was forced to hire a computer system paying Rs.1500/- per month. He wrote a letter on 28.9.2004 calling upon the opposite party to settle the claim. Finally through a letter dated 1.10.2004 the opposite party asked the complainant to submit the bill and receipt along with the damaged parts. On receiving this letter the complainant transported the computer with accessories to the office of the opposite party and, also, handed over a bill obtained from M/s Insoft System, Mysore. A discussion took place on 7.10.2004 in the office of the opposite party with the surveyor joining in. The loss was assessed at Rs.8280/- eliminating the printer and the U.P.S. When the complainant objected to such assessment, the opposite party asked him to get a quotation for an U.P.S and a printer. A quotation was submitted on 28.10.2004. But the opposite party sent a letter to the complainant alleging that instead of 1 KVA U.P.S, he had surrendered an inverter of the same capacity and that an inverter was not covered under the policy. <br /> <br /> 5. The complainant has averred that the surveyor did not raise any objection when the discussion took place at the opposite party’s office that the surrendered item was an inverter. He says “Inverter” is the came of the company which manufactured the U.P.S. He has asserted that he had taken all the precautionary measures while using the computer. He has, also, pointed out that it took seven months for the opposite party to repudiate the claim. <br /> <br /> 6. A legal notice was issued by the complainant on 21.3.2005 calling upon the opposite party to refund the excess premium collected from him and, also, the hire charges of Rs.1500/- per month he incurred due to failure on the part of the opposite party to settle the claim. This is apart from his claim of the sum insured Rs.1, 40,000/-. <br /> <br /> 7. The opposite party admits issuing an Electronic Equipment policy to the complainant. However, the receipt of the complainant’s letter dated 11.4.2003 for refund of excess premium has been denied. It is averred that as complainant did not declare the replacement value of the equipments at the time of renewal of the policy their value was continued as it was in the previous year. <br /> <br /> 8. Regarding the claim of the complainant the opposite party has defended that there was no delay as the loss assessor visited the complainant’s premises on 19.6.2004 just two days after he reported the incident. The loss assessor assessed it on both “repair” basis as well as “total loss” basis.<br /> <br /> 9. Regarding the complainant’s assertion that he had given a U.P.S and not inverter, the opposite party says that it came to their notice only when the complainant brought the equipments to their office and that the break down of the computer was on account of not using an U.P.S.<br /> <br /> 10. The opposite party says that the dispute of the complainant has to go before an arbitrator in accordance with the terms and conditions of the insurance policy.<br /> <br /> 11. Yet another defence of the opposite party is that the prices of the computers had gone down drastically at the time of breakdown of the computer and even a computer of higher configuration than the one the complainant was using would cost only Rs.26,000/-. <br /> <br /> 12. From the above contentions of the rival parties the following points arise for our consideration:<br /> <br /> a) Whether the complaint is maintainable?<br /> <br /> b) Whether the complainant proves that opposite party has collected excess premium from him?<br /> <br /> c) Whether the complainant proves that the opposite party has rendered deficient service by not settling his insurance claim?<br /> <br /> d) Whether the opposite party proves that the complainant was using an inverter and not an U.P.S?<br /> <br /> e) What relief or order?<br /> <br /> 13. We have answered the above points as under:<br /> <br /> Point 12(a): In the negative<br /> Point 12(b): In the negative<br /> Point 12(c): In the affirmative<br /> Point 12(d): In the negative<br /> Point 12(e): As per final order<br /> <br /> REASONS<br /> <br /> 14. Having regard to the nature of the complaint oral evidence has been recorded wherein Shri.Dharmendra Kumar, partner of the complainant firm has deposed as CW 1and the commissioner has deposed as CW 2. From the other side Shri.C.Nagaraj, Branch Manager of the opposite party Company has deposed as RW 1 and the surveyor of the insurance company has deposed as RW 2. A number of documents have been produced by both sides which have been dealt with at appropriate places in this Order.<br /> <br /> 15. POINT 12(a):- Our attention has been drawn to clause No.7 of the General Conditions of the policy which stipulates that if any difference arise as to the quantum to be paid under the policy such differences shall independently of all other questions be referred to the decision of arbitrator. It is further stated that no difference or dispute shall be referable to arbitration if the company has disputed or not accepted liability under or in respect of the policy. Section 3 of the Consumer Protection Act provides that the Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force. Hence, the arbitration clause is no bar for an aggrieved consumer to approach the Forum regardless of the fact that the contract with the opposite party has an arbitration clause built into it. Further, as we discuss this complaint further, we will notice that the dispute between the parties is not primarily with regard to the quantum payable under the policy but with regard to the items insured. The dispute is, also, not regarding the quantum of payment as the opposite party has repudiated the claim. As such the third paragraph of clause No.7 will operate as a bar for referring such a dispute to the arbitrator. Therefore, we hold that the complaint is maintainable and answer the point in the negative. <br /> <br /> 16. POINT 12(b):- The fact that when the claim arose there was a valid insurance contract is not in dispute. From the photo copy of the policy for the period from 24.7.2002 to 23.7.2003 is seen that the policy was taken by the Punjab National Bank. The premium collected was Rs.4363/-. The items comprised of in the policy are in two parts. The insured articles that are relevant to this complaint are Pentium III Mother Board, 64 MB RAM, Printer, U.P.S. The sum insured was Rs.1, 37,000/-. Another set of items comprising of multi media stabilizer, printer, scanner, U.P.S and web camera have been insured for Rs.1, 40,000/-. For the subsequent year the policy has been issued in the name of C.S.Dharmendra Kumar who has deposed as CW 1. The sum insured remains the same while the premium has gone up to Rs.4487/-. Though the complainant says that he requested the opposite party to collect premium on the basis of depreciated value of the computer we do not find any evidence of this issue having been raised with the opposite party anytime before the claim arose barring one letter addressed to the Manager, Punjab National Bank. According to the complainant the claim arose on 16.6.2004 when the computer and U.P.S stopped working. Any dispute with regard to the excess premium should have been raised prior to this date as no such dispute can be entertained after the claim arises. Though Punjab National Bank was the “insured” for the year 2002-03, the complainant himself has paid the premium for the year 2003-04. Hence, the complainant can not plead innocence. He should have raised the issue at the time of paying the premium itself. By opposite party’s own admission, the prices of the computers are falling. Hence, taking into account the current price for a computer of similar configuration as well as the depreciation, the premium for the year 2003-04 should have been less than that was collected for the year 2002-03. However, as observed above the complainant having kept quite then, can not make such a claim now. Hence, we answer the point in the negative. <br /> <br /> 17. POINT 12(c) & (d):-From the various correspondences between the parties that have been placed before us we gather that the complainant informed the opposite party about the non working of the computer and U.P.S on 17.6.2004. He, also, submitted an estimation for the replacement of the damaged parts on 5.7.2004. He sent a reminder on 28.9.2004 asked the opposite party about the fate of his claim. Then, the opposite party wrote a letter acknowledging the receipt of the complainant letter and stated that they had received the survey report only that day. When the surveyor was asked as to why he took such a long time to give his survey report he has stated that the complainant offered to produce the U.P.S before him and as such he was waiting for it to be produced. Then, it appears there was some discussion on 7.10.2004 between the complainant and the surveyor in the presence of the branch manager of the opposite party company wherein the complainant was asked to submit the quotation for the computer accessories. There is a letter written by the opposite party on 12.10.2004 reminding the complainant to submit the quotation early. The complainant furnished the same on 26.10.2004. <br /> <br /> 18. Over a month later on 28.11.2004 the surveyor wrote a letter to the complainant stating that while he had surrendered an inverter what was insured was an U.P.S and asked him to surrender the U.P.S. He, also, raised an objection that the quotation given by the complainant for the printer was for an improved version over the one covered under the policy. The complainant wrote a letter dated 15.12.2004 refuting the allegation that the equipment surrendered by him was an inverter. As reply the surveyor wrote another letter on 22.12.2004 explaining the difference between an inverter and an U.P.S. The complainant, also, wrote a letter on 28.12.2004 standing by his version. Finally, the opposite party repudiated the claim on 25.1.2005. There after the complainant issued a legal notice followed by a reply by the opposite party and the matter landed before this Forum.<br /> <br /> 19. Even before we come to the crux of the issue it is essential to make an observation on the manner in which the policy has been issued and the manner in which the complainant has filed this complaint. The insured articles have not been described properly in the policy. For example while the policy mentions about RAM, it does not speak about hard disk. Even if hard disk is covered under the policy we do not know what the capacity of the hard disk that is insured. Similarly, while the complainant says that he was using an U.P.S with 2 hours back up capacity the policy it does not reveal about the capacity of the U.P.S. Nor does it reveal whether the insurance extended to the batteries of the U.P.S. It is no wonder that the claim has reached the doors of this Forum. The proposal form has been filled in by the Manager, Punjab National Bank, Mysore. The proposal form, also, does not reveal the technical details of the equipments being insured. The opposite party instead of verifying it before issuing the policy has not bothered to do so. It is unbelievable that a Pentium III computer with 64 MB RAM manufactured in 2000(as described in the policy) has been insured for Rs.1,37,000/- in the year 2002. The O.P. who is in the business of insurance ought to have known the price of a personal computer. Unless the computer had some special value, sentimental or otherwise, there can be no reason for insuring this computer for such a princely sum. The opposite party who insured the computer for that sum in 2002 has come up with a defence that, today, even an improved version costs only Rs.26,000/-. This is atrocious. Can an equipment which is today a paltry Rs.26, 000/- could have cost more than 5 times its present value just 2 years back? We are not oblivious to the prices of the computers. <br /> <br /> 20. Let us give the benefit of doubt to the opposite party that it is a case of over insurance by the Manager, Punjab National Bank. But, as insurer acting in good faith is he justified in collecting premium knowing well that a two year old computer does not cost even half of the sum for which it is being insured? The concept of “utmost good faith” applies to the insurer as much as it applies to the insured. Unfortunately, the person who has contributed much to this mess, the manager of Punjab National Bank is not before us. He sent a proposal and a policy was blindly issued. Nobody spared a thought to the complainant. We wonder how a policy could be issued on the basis of the particulars given in the proposal form which does not describe the capacity of the hard disk, the make or model of the printer, the description of the U.P.S, the detailed specification of the multi media, etc., <br /> <br /> 21. Coming to the manner in which in this complaint has been filed we observe that the complainant merely says that computer and accessories got damaged. He has not explained what the accessories that got damaged are. As a result have restricted ourselves to the mother board, processor and the hard disk. He, also, failed to produce the invoice of purchase from the Punjab National Bank from where he had obtained a loan to purchase the computer. An opportunity was given to him to produce the same. We were curious to know how a computer could cost as much as Rs.2, 77,000/-. If, indeed it was a fact we could have readily agreed about the genuineness of his claim so that he would have received proper remedy. Unfortunately, the invoice was with his banker and the Manager sent a letter that the file is not traceable as the complainant’s account was closed in 2004. The complainant could have given the details of the configuration, model and make of the equipments to the Forum atleast. Even this he has not done. <br /> <br /> 22. The crux of the issue is whether the complainant was using an inverter or an U.P.S? The survey report dated 29.9.2004 is a bland report that does not even narrate the parts examined by the surveyor. The surveyor appears to have been stuck in the groove of technicalities of assessing the loss rather than examination of the insured articles. The surveyor says that the mother board, processor and the hard disk have been damaged. He says that it is an 80 GB hard disk. We will have to blindly accept it as the policy does not state the capacity of the hard disk. He goes on to write that during the operation of the computer system of the above detailed configuration 16.6.2004 (sic) at 18.30 Hrs, there was abrupt and erroneous in flow of power from the supply mains. Even before the activation of the controlling devices installed to safe guard the installation, the spikes caused definite damage to some of the sensitive components installed in the computer. The mother board, central processing unit and the hard disk of the computer had gone bad. The other parts of the computer claimed in the estimation such as U.P.S, printer, etc., may not have been damaged due to a single incident. These words indicate that the surveyor did not bother to test other equipments like the printer and U.P.S. He has given a very tentative finding that the printer and U.P.S may not have been damaged because of a single incident. Nevertheless, one thing is clear that he did see an U.P.S at the complainant’s place. This conclusion is further strengthened by the fact that his version changed only after the damaged equipments were summoned to the opposite party’s office. It was there that the surveyor first raised an objection that it was not an U.P.S but an inverter. The obvious question would be why did he not notice this fact when he inspected the equipments and took its photographs at the complainant’s premises? Why did he not mention it in his survey report? To this question the surveyor has said in his oral evidence that “I have not mentioned in my report that computer system was damaged due to use of inverter. It is true that I have opened the inverter, examined the same and taken the photographs. I could have stated in my report that the computer was burnt because of the use of inverter”. Such volte face of the surveyor brought the complaint to this Forum. Such volte face necessitated appointment of a commissioner. He came to the conclusion that the equipment in question was an U.P.S and not an inverter. Both the surveyor and the commissioner have stuck to their conclusions while deposing before the Forum. It is not for us to go into the technicalities to distinguish between an U.P.S and an inverter. Hence, we base our conclusion on only three factors. Firstly, that the surveyor did not mention in the survey report that he found an inverter and not an U.P.S. Secondly, that the complainant being a DTP operator could not have used an inverter with the computer for so many years. It is too elementary that only an U.P.S is used with a computer. Thirdly, the opposite party obviously did not make any enquiries into the correct configuration of the equipments when it was insured for the first time by the Punjab National Bank. Hence, on these grounds we refuse to accept the contention of the opposite party that the equipment surrendered by the complainant was an inverter.<br /> <br /> 23. Forget about the U.P.S. There is no proper finding by the surveyor about the printer, also. We do not know the make or the model of the printer. We do not know the configuration of the printer. What we do know is that the complainant has claimed that the printer, also, got damaged. The opposite party who is dealing with public money ought to have shown greater commitment. <br /> <br /> 24. We, now, know from the surveyor’s report that the mother board, processor, RAM and hard disk got damaged. From the above conclusions that we have drawn we have include the printer and the U.P.S to this list. The opposite party has not settled the claim. In fact, he has not properly investigated the claim. Under these circumstances we conclude that the opposite party has rendered deficient service and answer 12(c) in the affirmative and 12(d) in the negative. <br /> <br /> 25. In order to arrive at the amount of compensation that the complainant is entitled to we are inclined to look at the surveyor’s report. He has assessed it at Rs.10, 940/- on repair basis and Rs.8, 280/- on total loss basis. The technicalities in assessing the loss by deducting the salvage, depreciation, etc., will not restore the complainant to the original position as nearly as possible which is the bottom line in a contract of indemnity. The computer gleefully insured for Rs.1, 37,000/- in 2002 and when the claim arose in 2004 the insured is being offered 1/15th of that amount making all possible deductions! While the principle of indemnity does not allow the insured to make any profit from the insurance, it does attempt to place him back in the original position as far as possible. The computer which the complainant was using is now outdated and out of market. If we take the sum assured 9Rs.1,37,000/-) and allow depreciation at 10% per annum from the year 2000, the complainant gets Rs.80,895/-. But as already noted the purpose of contract of indemnity is not profit. It seeks to place the insured back to the original position as far as possible. Though the O.P. was not vigilant, when the matter has reached this Forum, we have to give the correct meaning to the contract of indemnity. We have on record a few quotations for the computers of configuration which is as close to the complainant’s computer as is practically possible. The quotation of M/s System Needs, Mysore filed by the opposite party is for Rs.18, 370/- which is inclusive of accessories like mouse, keyboard, floppy disk drive, etc including the printer. According to the surveyor the damaged items are the mother board, processor, RAM, hard disk, printer and U.P.S. We do not know the make or model of the printer. Further, the old cabinet of the complainant may not be suitable for mounting the new mother board, processor, etc., Hence, taking out from the above quotation the accessories which are not damaged, the total price of items to be replaced comes to Rs.12,975/-. It includes processor (2950/-), mother board (3300/-), RAM (Rs.325/- for 64 MB), hard disk (Rs.2200/-), optical drive (Rs.700/-), cabinet (Rs.950/-) and printer (Rs.2550/-). The U.P.S used by the complainant had 3 hours back up. We do not know whether the policy covered the gang of batteries also or only the U.P.S unit. Nor has the complainant told us whether only the U.P.S got damaged or both the U.P.S and the gang of batteries got damaged. Under these circumstances, we allow the claim only for the U.P.S. As the quotations filed by the parties give the price of the U.P.S inclusive of the price of the batteries, it is better to place the responsibility of buying the complainant an U.P.S on the opposite party. Apart from the above, the opposite party shall, also, pay the complainant cost of installation and replacement involved in the exercise which we restrict to Rs.2000/-. The policy has an excess clause and therefore an amount of Rs.2500/- is deductible from the claim amount. Added to this, the opposite party has a right to choose either payment of the claim amount awarded by this Forum or purchase a new equipment of similar configuration from the market. The other choice of restoring the damaged equipments through repairs is no longer available to the opposite party in view of the survey report as well as the delay in settling the claim. In any case computer parts being very delicate and spares getting outdated very fast restoration will not render justice to the complainant. Lastly, the opposite party is liable to pay some compensation and cost to the complainant, with these observations we proceed to pass the following order: <br /> <br /> ORDER<br /> <br /> Complaint is allowed as under:-<br /> <br /> A. The O.P. is given the option to choose any one of the following reliefs, within a period of one month from the date of this order by serving a letter in writing on the complainant, with a copy to this Forum. The options are:<br /> (i) To pay the complainant compensation of Rs.10,475/- towards all damaged equipments (excluding the UPS); <br /> OR<br /> (ii) To buy and deliver to the complainant a processor, a mother board, RAM [64 MB], hard disk [80 GB] and printer from M/s System Needs, Mysore, as per quotation filed by the O.P. If the price of the equipment has changed from the price mentioned in the quotation, the O.P. shall bear such additional expenses. <br /> <br /> <br /> <br /> <br /> B. The O.P. shall buy one (online) UPS having two hours backup and hand over the same along with necessary documents to the complainant, within one month from the date of this order. Any how, the complainant is not entitled for any batteries.<br /> C. The opposite party shall pay the complainant compensation of Rs.5000/- within one month from the date of this order failing which the said amount shall carry interest at 9% p.a thereafter until the date of payment. <br /> D. If the O.P. fails to comply with the above order within one month from the date of this order, they shall pay global compensation of Rs.50,000/- to the complainant with interest at the rate of 9% p.a. from the date of this order till the date of payment.<br /> E. The O.P. shall pay cost of Rs.1,000/- to the complainant.<br /> F. If the O.P. is paying the global compensation, he is not liable to pay compensation and cost, mentioned at C and E above.<br /> G. Give a copy of this order to both parties according to Rules.<br />