First Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
First Appeal No.191 of 2011
Date of institution : 27.01.2011
Date of decision : 01.09.2015
Oriental Insurance Company Limited, Opposite S.D.M. Court, Dalhousie Road, Pathankot, District Gurdaspur, through its Branch Manager. …….Appellant/Opposite Party
Versus
M/s Varinder Dogra Power Project Private Limited, 315-316, Sahil Palaza, Dalhousie Road, Pathankot through Varinder Dogra its Managing Director. …..…Respondent/Complainant
First Appeal against order dated 08.12.2010 passed by The District Consumer Disputes Redressal Forum, Gurdaspur.
Quorum:-
Mr. J. S. Klar, Presiding Judicial Member
Mr. H. S. Guram, Member.
Present:-
For the appellant : Sh. Satpal Dhamija, Advocate
For the respondent : Sh. Vivek Salathia, Advocate
H. S. GURAM, MEMBER:-
This appeal has been preferred by the appellant (OP in the complaint) against the respondent of this appeal (complainant in the complaint), assailing order dated 08.12.2010 passed by the District Consumer Disputes Redressal Forum Gurdaspur, (in short 'District Forum'), in CC No. 382 dated 18.07.2006, vide which, the complaint filed by the complainant was partly allowed by directing OP to settle the claim of the complainant and indemnify his loss to the extent of Rs.1,71,586/- as per surveyor's report alongwith interest @ 9% P.A. from the date of filing the complaint till actual realization of the amount.
2. The brief facts of the case are that M/s. Varinder Dogra Power Project Private Limited Pathankot, got insurance for its Mini Hydel Project Power Project Works. H.E.P 2 x 500 K.W. at Manj Hall District Chamba, Himachal Pradesh. The said company purchased the insurance cover for its project for Rs.5 crores from OP's insurance company. It was pleaded that on 04.02.2005, there was heavy rain in the area and it caused loss to the project due to land slide. The said loss was duly reported to the OP vide the letter dated 07.02.2005. The OP appointed Sh. K.K.Mahajan, Engineer-in-Chief (Retd.), on the receipt of the intimation from the complainant to assess the loss. The said surveyor visited the plot after going through the record and spot inspection and assessed the loss to the tune of Rs.1,71,586/- after applying excess clause thereto. It was further maintained that the loss was assessed to the extent of Rs.1,71,586/-, by the said surveyor illegally, who had applied the excess clause twice, instead of one time loss, as reported to the OP due to heavy rains on 04.02.2005. Moreover, the said surveyor omitted certain items destroyed in the land slide of complainant and only allowed a lower rate on account of loss so assessed by him. On receipt of the report of the surveyor, the complainant represented to the insurance company to look into the report submitted by the surveyor, as he had not taken into account the specific losses suffered by them in the above cataclysm. Instead of looking into the representation of complainant and without enquiring into the same from the first surveyor, the OP appointed another surveyor namely Sh. A.J. Dhillon afresh to review the whole assessment of the loss. The second surveyor visited the site, who did not inspect all the damaged works at the site and rather started raising queries to the complainant to provide papers to him. The second surveyor submitted his survey report by stating that the loss occurred at the site of the complainant was not permissible, as per terms and conditions of the policy, due to the fact that the power house under construction was being constructed with a faulty design. However, it was submitted that complainant had invested crores of rupees in the project, and the project design was got approved from qualified engineers as well. The project of construction work was done under supervision of Supervisor, having the required engineering qualifications. On the basis of the second surveyor report, OP insurance company, vide its letter dated 12.02.2005 repudiated the claim on the ground as "No Claim". It was further averred that the complainant had suffered a loss to the extent of Rs.10,91,543/-. The second surveyor appointed by the OP did not assess the loss incurred by it correctly. On receiving the no claim letter, the complainant filed its complaint before the District Forum Gurdaspur, and made a prayer that OP be directed to pay a sum of Rs.10,91,543/- alongwith interest @18% from the date of loss till its realization; and also to pay litigation costs of Rs.21,000/-.
3. Upon notice, OP submitted its written reply and took preliminary objections that the complainant has no locus standi to file the complaint. It was also pleaded that the complainant is not consumer of OP as defined under the Act. It was further stated that the complainant had engaged number of workers and employees for the execution of the project and its activity is commercial one and as such the matter is not covered under the Consumer Protection Act. It was admitted that on receipt of intimation from the complainant, the OP appointed its surveyor Mr. K.K. Mahajan, who had immediately inspected the site and took note of the happening of loss and the documents pertaining to the said loss. The said surveyor after inspection of the site and going through the documents thus assessed the loss to the extent of Rs.1,71,586/- and thereafter submitted his detailed report, vide his letter dated 07.05.2005. The said survey report after receipt from its first surveyor was duly sent to the complainant. The complainant had given a representation to it vide its letter dated 13.05.2012 for review of the claim, as assessed by the surveyor. The Divisional Manager after considering the request of the complainant deputed Mr. A.J. Dhillon second surveyor to assess the loss afresh. The second surveyor had given a report that the complainant had tried to claim losses which might have occurred on different dates and thus claimed an excess amount of the loss, though, the said loss had not occurred. In the second surveyor report, Sh. A.J. Dhillon made an observation that the work of power project by the complainant was not in conformity with the design and instructions as laid down by Khanna's Hand Book on power project design. Surveyor had excluded certain items due to faulty design which was not covered under the policy. It was also observed in the second surveyor report that damages, as claimed by the complainant had, in fact, occurred on three occasions to the extent of Rs.20,300/- each and after going by the condition of deducting, the loss to the extent of Rs.30,000/-, as such no compensation was payable to the complainant and accordingly submitted a report to OP company, vide his letter dated 13.09.2005. In view of above said second report, the OP insurance company is not liable to pay any damages or interest to complainant. It was further submitted, that District Forum has no jurisdiction to hear the complaint. On merits, it reiterated its averments as taken in the preliminary objections and thus prayed that the complaint filed by the complainant be dismissed with costs.
4. Complainant tendered in evidence affidavit of Sh. Varinder Dogra, MD of the company Ex.C-W1, copy of the endorsement No. 233800-001-01564-44-05-21-01-00006 dated 23.10.2004, in lieu of policy No. 233800-001-01564-44-0033-00019 having date of commencement 24.02.2014 covering the risk pertaining to errection all risk policy Ex.C-A, receipt of premium for Rs.9,699/- Ex.C-B, receipt No. 835345 dated 23.07.2004, endorsement dated 11.06.2004 for the policy no. 233800-00-01564-044-033-00019 Ex.C-C, wherein all the conditions of the policy and cover therein is provided annexure to the policy documents misleading out the description of the project cost covered under project Ex.C-E premium calculation chart for the insurance Ex.C-F, premium wrote for 18 months extension period Ex.C-G letter of the complainant written to OP dated 07.02.2005 Ex.C-i, letter written by the complainant to the first surveyor dated 21.02.2005 Ex.C-i/a, extract of claim for loss Ex.C-i/b (9 pages) representation letter written by the complainant to the Divisional Manager Oriental Insurance Company, vide letter dated 25.05.2005 Ex.C-2 (4 pages), report of the surveyor namely K.K. Mahajan Ex.C-3 (7 pages), letter written by the complainant to the second surveyor dated 29.07.2005 Ex.C-4 (4 pages), copy of the legal notice dated 06.02.2006 Ex.C-5A, copy of the drawings Ex.C-5 (2 pages) report given by Kapil Kumar, Chartered Accountant providing the projection of project cost (2 pages) Ex.C-6, copy of the letter addressed to engineer project planners SAS Nagar, Mohali dated 13.08.2005 Ex.C-7 (2 pages), copy of the Tribune dated 24.02.2005 Ex.C-8, copy of the OP company letter dated 24.02.2005 Ex.C-8, copy of the OP company letter dated 12.12.2005 and enclosing the report of second surveyor with this letter and closed his evidence. OP tendered in evidence the affidavit of Divisional Manager Sh. Jagmohan Singh Ex.R-1, copy of notice received Ex.R-2, copy of the reply of the legal notice Ex.R-3, copy of the report of the surveyor Sh. A.J. Dhillon dated 13.09.2005 Ex.R-4 and closed the evidence. On conclusion of evidence and argument, the District Forum partly allowed the complaint of the complainant. Aggrieved by impugned order of District Forum, the OP now appellant has filed the appeal against the same seeking its reversal.
5. We have heard the arguments of the counsel for the appellant to the effect that the appointment of second surveyor was within the ambit of the insurance company. Insurance company was having the requisite power to appoint the second surveyor. It has been further argued that the policy was given at the inception of the policy at the time of issuing of the first policy on 24.08.002 to 24.02.2004, which was covering the risk of erection all risk policy. When the said policy was renewed, the erection risk was deleted and as such the second surveyor had looked into the terms and conditions of the second policy, which excluded construction risks. The counsel further argued that the District Forum had wrongly directed it to pay the amount of insurance claim as per the report of the first surveyor. The said report was challenged by the complainant as he was not satisfied with the quantum of relief granted to him. The second surveyor was only appointed on the request of the complainant. As such, the complainant would not be competent to wriggle out from the report of the second surveyor, in which it was found that no amount of compensation under the insurance was payable.
6. The counsel for the respondent argued that though it was correct that amount as assessed by the first surveyor was less and it made representation to the Divisional Manger of the OP insurance company to look into of awarding more compensation, as the total amount of insurance covered under the said policy was to the extent of Rs.5 crores. However, on the receipt of the repudiation letter issued by the OP company, it was forced to file its consumer complaint in the District Forum. The District Forum looked into all the averments of the OP and had rightly allowed the complaint by examining the first surveyor report and gave the direction to the OP to pay the amount, as assessed by its first surveyor. The counsel for the respondent further argued that they did not file an appeal against the impugned order of the District Forum and the order so passed by the District Forum, be affirmed, as such, the appeal filed by the OP against the impugned order is based on wrong assumptions and needs to be dismissed.
7. We have perused the record of the District Forum which was called at the stage of admission and had also looked into the order of the District Forum.
8. Counsel for the OP contended that complainant was private limited company running commercial venture. As such, the complainant did not fall under the definition of consumer as envisaged under the Consume Protection Act. In our opinion, contention of learned counsel cannot be accepted. In view of the authority as decided by the Supreme Court in Volume 1 (2005) CPJ 27 (NC) given by the Hon'ble Supreme Court in the case titled as M/s Harsolia Motors Vs. National Insurance Co. Ltd., in which it was observed that, wherein, insurance has been taken for commercial unit, then hiring of services for commercial purpose, it is not excluded, from the purview of Consumer Protection Act, 1986, because hiring of service of insurance company by taking an insurance policy by complainant who was carrying on commercial activity cannot be held to be for commercial purpose. It was for reimbursement of the loss suffered by the company. It has been further observed that, where services are hired in a activity which is not directly intended to generate profit, then it would not be for commercial purpose and the person who takes insurance policy to cover envisaged risk does not take policy for commercial purpose. But, it takes the same for indemnification of actual loss only. Thus, complainant is a consumer under Section 2 (1) (d) of Consumer Protection Act, 1986.
9. We have perused insurance documents placed on the District Forum file Ex.C-A i.e. the endorsement pertaining to the insurance policy No. 233800-001-0154-44-03-00019 dated 24.08.2004. As per endorsement No. 233800-001-01564-44-05-21-01-00006 dated 23.07.2004, it is clearly stated that this policy which had expired on 24.02.2004 was further extended up to the period of 05.03.2005. In the said endorsement certificate, it is written that this endorsement is issued subject to otherwise to the terms and conditions, limitations and inspection of the original policy, which would remain unchanged. If we go further and peruse the document Ex.C-C dated 11.06.2004, this endorsement states that this endorsement was issued for covering erection of all risk policy and includes the annexure which provides the basic cover provided to the complainant for a risk factor of Rs.5 crores and all the terms and conditions, limitations and exceptions of the original policy would remain unchanged. Thus, from the perusal of these two documents, we do not agree with the contentions of the counsel for the appellant that when the second surveyor had looked into terms and conditions of the policy renewed after 24.02.2004, the earlier policy which covered erection all risk policy was not having due validation, vide endorsement dated 23.07.2004. Rather these two endorsements states that the original terms and conditions pertaining to erection of all risk policy issued by the OP in favour of the complainant would cover all the risks, which were covered under the original policy given to the complainant. As such, the arguments put forth by the counsel supporting the version of the second surveyor being right in disallowing the loss of amounts suffered by the complainant is not a valid argument. We have also gone through report of the first surveyor, wherein, he had assessed the loss by comparing viz-a-viz the loss assessed by the complainant and had rightly assessed the loss to be compensated to the complainant.
10. Sequel to the above observations, we are of the opinion that the appeal filed by the appellant against the impugned order is without merit and the same is dismissed. The impugned order of the District Forum is affirmed.
11. Appellant had deposited a sum of Rs.25,000/- at the time of filing this appeal in the commission. The registry is hereby directed to remit Rs.25,000/- alongwith interest, if any, in favour of the respondent/complainant by way of a crossed cheque/demand draft after the expiry of 45 days from the date of this order, and appellant is further directed to pay the remaining amount to the complainant as per directions of the District Forum
12. The arguments in this appeal were heard on 18.08.2015 and the order was reserved. Now, the order be communicated to the parties as per rules.
13. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(J.S. Klar)
Presiding Judicial Member
(H.S. Guram)
Member
September 01 ,2015
RK 2
