Date of Filing : 18.05. 2011
Date of Order : 04.04.2016.
DISTRICT CONSUMER DISPUTE REDRESSAL FORUM, CHENNAI(SOUTH)
2nd Floor, Frazer Bridge Road, V.O.C.Nagar, Park Town, Chennai-3
PRESENT: THIRU. B. RAMALINGAM M.A.M.L., : PRESIDENT
TMT. K.AMALA, M.A. L.L.B., : MEMBER I
DR. T.PAUL RAJASEKARAN, M.A ,D.Min.PGDHRDI, AIII,BCS : MEMBER II
C.C.NO.203/2011
MONDAY THIS 4TH DAY OF APRIL 2016
M/s. OPG Metal (P) Limited,
Rep. by its General Manager,
No.117, P.S.Sivasamy Salai,
ST. Ebba’s Avenue, Mylapore,
Chennai 600 004. ..Complainant
..Vs..
M/s. Bajaj Allianz General Insurance Co. Ltd.,
Rep. by its Branch Manager,
No.25/26, Prince Towers, 4th Floor,
College Road, Nugambakkam,
Chennai 600 006. ..Opposite party.
For the Complainant : M/s. K. Ramaswamy & another
For the Opposite party : M/s. M.B.Gopalan & others.
Complaint under section 12 of the Consumer Protection Act 1986. Complaint is filed seeking direction against the opposite parties to pay a sum of Rs.7,17,089/- being the balance amount with interest and also to pay a sum of Rs.25,000/- as compensation towards mental agony and also cost of the complaint to the complainant.
ORDER
THIRU. T.PAUL RAJASEKARAN :: MEMBER-II
1.The case of the complainant is briefly as follows:
The complainant had taken a Standard Fire and Special Perils Policy with the opposite party (Bajaj Allianz Insurance Company Limited) for the period from 28.3.2008 to 27.3.2009 for a sum of Rs.13 Crores by paying the premium of Rs.52,650/- with service tax totaling Rs.59,158/-. In the within mentioned policy the opposite party agreed to pay the insured value of property at the time of happening of its destruction or the amount of such damage or at its option reinstate or replace such property or any part thereof. Whileso on 16.8.2008 one of the insured machinery namely Furnance had suddenly exploded by Fire accident and stopped from its working condition which was duly reported to the opposite party. Accordingly the insured submitted claim form claiming Rs.15,73,626/- for replacement of spare-parts for the affected machinery actually incurred during restoration of damages. The opposite party did not take any steps to settle the claim of the complainant or as per Insurance Regulatory and Development Authority Regulation 2002. The opposite party admitted the claim and credited a sum of Rs.6,90,272/- on 9.1.2009 in the complainant’s account and the complainant accepted this settlement as full and final settlement of claim with protest. The opposite party’s surveyor assessed the loss as Rs.15,73,626/- in which he debited Rs.1,55,625/- as salvage, and policy excess Rs.10,000/- which was debited and reinsurance premium Rs.640/- and also requested a another claim discharge voucher for Rs.14,07,361/-. There was no response fro the opposite party, and in order to avoid delay in getting admitted amount and received a sum of Rs.6,90,272/- on 16.1.2009. When the complainant wrote a letter calling upon the opposite party to pay Rs.7,17,089/- being the balance amount of claim payable to the complainant and failed and neglected to pay as per demand of complainant. As such the complainant sought for claims for a sum of Rs.7,17,089/- being the balance amount of the claim for loss suffered by the complainant with interest at the rate of 12% p.a. from the date of complaint and also to pay a sum of Rs.25,000/- as compensation towards mental agony and to pay cost of the complaint to the complainant. Hence the complaint.
Written version opposite party is as follows:
2. It denies all the averments and allegation contained in the complaint except those that are specifically admitted herein. The complaint is barred by limitation and liable to be dismissed on this ground itself. It is true that the complainant had availed Standard Fire & Special Perils Policy for the period from 28.3.2008 to 27.3.2009. The opposite party submit that the policy is subject to condition No.10 of the within mentioned policy the complainant will bear a rateable proportion of the loss and the complainant had submitted the invoice, bills and other mandatory documents pertaining to the claim with claims processing office on 30.12.2009, and the payment as per the survey report was released within a week of the same. Hence there is no deficiency in service on the part of the opposite party. Therefore this compliant deserve to be dismissed with costs.
3. Complainant has filed his Proof affidavit and Ex.A1 to Ex.A7 were marked on the side of the complainant. Proof affidavit of Opposite party filed and Ex.B1 to Ex.B4 were marked on the side of the opposite party.
4. The points that arise for consideration are as follows:-
1) Whether there is any deficiency in service on the part of the opposite parties?
- Whether the complainant is entitled to the reliefs sought for?.
5. POINTS 1 & 2 :
Perused the complaint filed by the complainant and his proof affidavit and documents Ex.A1 to Ex.A7 were marked on the side of the complainant. Written version and proof affidavit filed by the opposite party and Ex.B1 to Ex.B3 were marked on the side of the opposite party and also considered the both side arguments.
6. The complainant had taken a Standard Fire and Special Perils Policy with the opposite party (Bajaj Allianz Insurance Company Limited) for the period from 28.3.2008 to 27.3.2009 for a sum of Rs.13 crores by paying the premium of Rs.52,650/- with service tax totaling to Rs.59,158/-. The policy is subject to the conditions, clauses, warranties incorporated the schedule of the policy along with agreed bank clause, Designation of Property clause, Local Authority Clause, Reinstatement value Policy clause, Terrorism damage exclusion warranty and the said subject matter was hypothecated to M/s. Indian Overseas bank C & IC Branch, Chennai-4. (Ex.A1).
7. In the within mentioned policy, the opposite party agreed to pay the insured value of property at the time of happening of its destruction or the amount of such damage or at its option reinstate or replace such property or any part thereof. This policy covers 12 risks which were mentioned in the recital clause of the policy and conditions and explanation stipulated therein. It also describes 13 exclusion and the general conditions which has been enlightened through the policy given to the complainant. The general condition No.1 stipulates, “this policy shall be voidable in the event of mis-representation or mis-description or non disclosure of any material fact of the subject matter insured”. Further, on the happening of any loss or damage the complainant shall forthwith, give notice thereof to the opposite party and shall within 15 days after the loss or damage or such further time as the opposite party may in writing allow in that behalf, deliver to the company. Under condition No.10 of the policy, it stipulates “If the property hereby insured shall at the breaking out of any fire or at the commencement of any destruction of or damage to the property by any other peril hereby insured against be collectively of greater value than the sum insured thereon, then the insured shall be considered as being his own insurer for the difference and shall bear a ratable proportion of the loss accordingly.” Every item, if more than one, of the policy shall be separately subject to this condition. Condition No.15 stipulates the complainant should bear the pro-rata premium for the unexpired period from the date of such loss to keep the some insured with full extent. The prorate premium will be calculated from the date of loss till the expiry of the policy.
8. The complainant had insured his property for Rs.4 crores for building Rs.8.95 crores for plant machinery and Rs.5 lakhs for furniture and Fixtures fittings, totaling to Rs.13 crores and the said subject matter was insured as “occupied as Engineering work shop”. The complainant intimated about the loss to the opposite party on 16.8.2008 (Ex.A2). about the accident that there was a blasting in furnace “C” C2 crucible and requested the opposite party to depute the surveyor. The complainant submitted the claim form mentioning the damage of the property “Electrotherm Medium Frequency Melting Furnace C2 crucible “claimed amount Rs.15,73,626/-(A3). Upon the receipt of claim intimation the opposite party had appointed a surveyor to assess the loss and they have inspected the damaged spot where the explosion took place in the furnace on 17.8.2008 & 3rd September 2008 and visited the factory premises on 5.9.2008 and preliminary report was submitted to the insurer on 8.9.2008 and further documents and verification were made with the complainant and found, “ the coreless Induction Furnace consists of a refractory crucible surrounded by a helical water cooled copper conductor coil, the coil was surrounded by the number of lamination packets constructed of CRGO silicon steel, the complete assembly was mounted in a fabricated steel structure and tilted hydraulically”. On 3.9.2008 the Supervisor of the complainant reported to the survey is that he heard a heavy sound from crucible C2 of the furnace and found the A/c sheets of the shed had completely blown off and leakage of molten metal was also observed from the crucible and furnace area was filled with steam and was not possible to enter into the affected place. After the steam had receded and the supervisor noticed that furnace crucible was badly damaged and molten metal was leaking from the side of the furnace.” Based on this statement the surveyor started investigating, verifying all the records from the complainant pertaining to this accident and found, the admissibility of the claim was arrived on re-in statement clause attached with the within mentioned policy.
9. The surveyor on strict scrutiny of the papers shown and submitted to him he found the subject matter was not adequately insured. Thereby it had attracted 42.72 % under insurance. This could be construed as mis-representation but the insurer had taken a positive view and applied under insurance.
10. The complainant allegation was that the opposite party admitted the claim and credited a sum of Rs.6,90,272/- on 16.1.2009 in the complainant’s account and the complainant accepted this settlement as full and final settlement. The opposite party’s surveyor assessed the loss as Rs.15,73,626/- in which he debited Rs.1,55,625/- as salvage, and policy excess Rs.10,000/- which was debited and reinsurance premium Rs.640/- was credited to opposite party account and net loss assessed and credited to the complainant account Rs.6,90,272/. The complainant was not disputing about the deduction to salvage value, policy excess, and reinstatement premium but contending that under insurance percentage of 42.47 % and deduction of Rs.1,65,625/- from the accessed loss of Rs.15,73,6260/- was disputed and he prays that the opposite party has to pay balance of Rs.14,07,361/-. The correspondence to the opposite party were made by the claimant and no response was given by the opposite party Hence he approached this forum claiming Rs.6,90,272/- as the difference payable to him in the loss assessed and compensation of Rs.25,000/- for mental agony.
11. The complainant stated that the opposite party should not apply under insurance in RIV policy and the averments made by the opposite party that the complainant will not come under the purview of Consumer since it is the company, barred by limitation because the cause of action arose from the date of loss i.e. on 16.8.2008 and full discharge was made by the complainant on 15.1.2009 without making any protest (Ex.B4). Hence the claim made under Sec.10 of the within mentioned policy the complainant will bear a retable proportion of the loss and the opposite party had relying upon the following judgments as follows:
1. III 2009 CPJ 90 (SC) Supreme Court of India
SIKKA PAPERS LIMITED
..VS..
NATIONAL INSURANCE COMPANY LIMITED & ORS.
It is held that
ii) “Under insurance” of Machinery proved - Contention under insurance, if any, must be calculated at time of insurance of policy – Contention not acceptable - Value of items declared by insured at the time of insurance policy – Element of under insurance calculated by insurer at the time of assessment of loss – Sum assured, if less than amount required to be insured, insurer will pay in such proportion as sum insured bears to amount Insured – Prorata formula applied. The deduction from loss assessed as under insurance Deduction justified - No relief entitled.
2. II (2008) CPJ 173 (NC)
SAINUL ABEDIN & ANR
..VS..
NEW INDIA ASSURNCE CO. LTD & ORS.
The application of under insurance is validated. Based on these two judgments the under insurance factor applied in this case is justifiable and the complainant cannot seek for the refund of under insurance applied in the assessment of loss furnish in the loss assessment.
Regarding the limitations judgments as follows:
IV (2014) CPJ 2970 (NC)
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
GLOBAL ISPAT LTD.
..VS..
ORIENTAL INSURANCE COMPANY
an order was passed “as complainant has not filed the complaint within period of 12 months from the date of repudiation on the part of the claim complaint filed by the complainant before the State Commission was barred by limitation and complainant was not to get the benefit of limitation provided U/s 24A of COPRA 1986 and learned State Commission has not committed any illegality in passing the impugned order and appeal is liable to be dismissed here in this case the limitation clause was 24A.
12. Regarding full discharge the opposite party has brought three citations as follows:
- I (2015) CPJA 681 (NC)
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
MJMJ MEDICHEM SURGICALS
..VS..
NATIONAL INSURANCE COMPANY LTD. & ORS.
2. I (2015) CPJ 185 (NC)
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
GARG ACRYLICS LTD.,
..VS..
UNITED INDIA INSURANCE CO. LTD.,
3. ( 2014) 8 supreme 631
NEW INDIA ASSURNCE COMPANY LTD.
.VS.
GENUS POWER INFRASTRUCTURE LTD.,
It is held that :
“when payment is accepted in full and final settlement of claim and letter of subrogation and discharge is signed, plea of pressure, coercion etc. that too without any details, cannot be raised later,”..
there was no immediate reaction to discharge voucher and immediate protest, whisper, word or sellable for the period of 7 days the complainant should have protested immediately by sending telegram or sending protest immediately.
13. Based on all these citation the opposite party contended that the said claim was barred by limitation and full discharge was accepted and he will not come under purview of consumer and his surveyor and the opposite party have clearly indicated their offer which was acknowledged by the complainant hence it is pleaded by the learned the counsel to dismiss the case.
14. Pursuant on the proof affidavit, written arguments, citations and documents filed by complainant and the opposite party the complainant had insured only for Rs.8,95,00,000/ towards machinery and Rs.4,00,00,000 towards building and Rs.5,00,000/- towards furniture fitting the total sum assured is Rs.13, crores as per policy, copy submitted Whereas the surveyor took the valuation of plant and machinery and assessed the replacement value as Rs.15,62,38,589/- but actual sum insured for plant & machinery is Rs.8,95,00,000/- by applying under insurance factor Rs.42.72% where the under insurance amount to Rs.6,67,38,589/- thereby the insurer is deprived of short premium from the complainant. The complainant cannot have the selective insurance according to his whims and fancies, it is obligatory in the contract of insurance, the principle Uberima afide states there should not be any concealment or misrepresentation or suppression of material fact in the parties to contract the question of “caveat emptor” will not arise in insurance contract if the utmost good faith is not followed both to the contract the contract becomes void. In this compliant the opposite party in good spirit accepted the liability and applied the principle of under Insurance which has to be appreciated.
15. The claims can be settled either indemnity basis or reinstatement value basis. In case of “indemnity basis” the value is related to the age, present condition and suitability for use of the asset and hence depreciation because of age and use is taken into account. In the “re-instatement value basis” no depreciation will be deducted and settlement of claim will be “new for old” basis. It will reflect the cost of replacing the existing asset by a new asset of similar type, capacity and utility. The complainant allegation on not to apply depreciation in assessing the loss, could not be accepted and it is against the provision of insurance assessment and the insured cannot have a selective insurance and cannot give an under value, where the complainant is supposed to declare the full value of assets. In this case, the application of under insurance factor in admissibility of claim is in order. The complainant had not disputed about the salvage value, recovery of reinstatement premium and the policy excess. Though the opposite party had not replied to the request of clarification that the details of claim made by the complainant and but the settlement is found to be in order. The condition No.10 of the within mentioned policy is answered that the insured is expected to pay the premium for the full sum insured because of under insurance, the insurers have lost the premium and the application of under insurance is valid ground for the insurer in imposing under insurance and arriving of the assessment. The complainant could have claimed for the damages of Asbestos Sheets and the other damages were due to melting of the Motel metal in the surrounding areas, by the incident of the explosion triggered through crucible, which is covered under the scope of policy, but failed to do so.
16. Taking into consideration of RIV clause, “the insured must commenced and carried out with reasonable dispatched and in any case must be completed within 12 months after the destruction or damage or within such further time as a company may in writing allow otherwise no payment beyond the amount which would have payable under this policy. In this case, the opposite party assessed the loss and intimated the claimant about the settlement and credited the same in their account as full and final settlement. Hence the question of further payment will not arise. Therefore, we are of the considered view that the there is no deficiency of service, no unfair trade practice and opposite parties stand on full and final settlement given by discharging without any protest, it cannot be claimed after discharge. Hence we took a decision to dismiss the case with no cost.
In the result, the complaint is dismissed. No cost.
Dictated directly by the Member-II to the Assistant, transcribed and computerized by her, corrected by the Member-II and pronounced by us in the open Forum on this the 4th day of April 2016.
MEMBER-I MEMBER-II PRESIDENT.
Complainant’s side documents :
Ex.A1- - - Copy of Standard Fire and Special Perils Policy for
Period from 28.3.2008 to 27.3.2009.
Ex.A2- 16.8.2008 - Copy of intimation of Fire Accident reported to the
Opposite party.
Ex.A3- 13.10.2008 - Copy of Claim form.
Ex.A4- 12.1.2009 - Copy of letter from opposite party to the complainant
Ex.A5- 13.1.2009 - Copy of letter from complainant to the opposite party
Demanding a sum of Rs.14,07,361/-
Ex.A6- 16.1.2009 - Copy of claim discharge voucher signed under receipt.
Ex.A7- 31.1.2009 - Copy of letter from complainant to the opposite party
Demanding Rs.7,17,089//-
Opposite party’s side documents:
Ex.B1- - - Copy of Insurance Policy issued by the opposite party
Ex.B2-19.12.2009- Copy of surveyor’s report with enclosure.
Ex.B3- 16.1.2009 - Copy of letter given by the complainant to
the opposite party
Ex.B4- 15.1.2009 - Copy of claim discharge voucher given by the
Complainant to the opposite party.
MEMBER-I MEMBER-II PRESIDENT.
