DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, PALAKKAD

Dated this the  27^th   day of June, 2024

Present      :   Sri. Vinay Menon V., President

                   :   Sri. Krishnankutty N.K., Member                               Date of Filing: 26/08/2022    

              CC/160/2022

Jayeshkumar K.K.,

S/o. K. Kumaran,

Kodavamparambil House,

Nagalassery, Kothachira Post,

Palakkad  - 679 535.                                                    -           Complainant

(By Adv.K.Dhananjayan)

                                                                                      Vs

1. M/s. National Insurance Co. Ltd.,

Regd. Office 3, Middleton Street,

Prafulachandra Sen Sarani,

Kolkata, West Bengal – 700 071.

2. M/s. National Insurance Co. Ltd.,

Regd. Office 3, Middleton Street,

Prafulachandra Sen Sarani,

Kolkata, West Bengal – 700 071.

Rep.by its Manager / MD /Authorised Signatory

3. M/s. National Insurance Co. Ltd.,

Branch Office,

Aluva Division, Urumbath Building,

Pambu Junction, Aluva,

Ernakulam – 683 101

Rep.by its Manager / Authorised Signatory.              -           Opposite parties

(OPs by Adv. M. Krishnadas)

O R D E R

By Sri. Vinay Menon V., President

1. Quintessential pleadings are that the complainant is self-employed and is in possession of earthmovers and excavators. The excavator in question which met with an accident was covered under a policy issued by the OP. Said excavator dashed against an electric pole due to mechanical failure, i.e. slow response to the break of the excavator. The accident occurred due to substandard quality of the product. Complainant paid an amount of Rs.11,737/- demanded by the KSEB. The OP refused to indemnify this amount. It is aggrieved by repudiation of the claim by OPs, that this complaint is filed.
2. OPs filed detailed version alleging that the complainant is carrying out a commercial activity and hence this complaint is not maintainable before this Commission.  Accident occurred outside the premises wherein the machinery was to be kept to be under the coverage of the policy. Accident occurred due to the substandard quality of the product. These instances are not contemplated under the policy. Furthermore, the policy does not cover any third-party liability. Therefore, the complaint is only liable to be dismissed.
3.  The following issues were framed for consideration:

1. Whether the complaint is maintainable before the Commission and whether the complainant is a consumer under the CP Act?
2. Whether the complainant had informed the OP about the incident and submitted claim form and necessary documents to OP1?
3. Whether the OPs are liable to indemnify the 3^rd party injury / property as per the policy terms and conditions?
4. Whether the alleged incident was out of the opted location as per the policy?
5. Whether there is deficiency in service on the part of OPs?
6. Whether the complainant is entitled to any of the reliefs sought for?
7. Any other reliefs?

4.         (i)      Documentary evidence of complainant comprised of proof affidavit and Exhibits A1  & A2.    Complainant was examined as PW1.  

            (ii)    O.P. filed proof affidavit and marked Ext.B1.

  Issue No.1

5.         The opposite party has raised a contention that the complainant is carrying out a large-scale business which is a commercial and business activity. Even though the OP has raised this contention they had failed to adduce any evidence to show that the commercial activity of the complainant is so large that it is excluded.

A mere commercial activity carried out for earning a livelihood is not excluded under the Act.

6.         Hence, this issue is found in favour of the complainant.

            Issue Nos.3 & 4

7.         In the facts and circumstances of the case, we thought that it would be appropriate to consider the question of coverage rendered under the policy before considering Issue No.2. 

8.         Three primary defenses raised by the opposite party against allowing the complainant’s claim and that the incident does not come under the policy are that

1)  Third party damages are not covered under the policy;

2)  The accident occurred outside the premises wherein the machinery was supposed to   have been kept.

3) The accident occurred due to sub-standard quality of the machinery which is not covered under the policy.

9.         It is necessary to assay whether the grounds for repudiation will hold water.

1)         Third party damages are not covered.

10.       In paragraph 13 of their version, the OPs contend that the policy is a Contractors Plant and Machinery Policy which covers only the damage to the excavator and does not cover the 3^rd party injury or property. No premium is paid or received to cover any 3^rd party injury. Therefore, the OPs are not bound to respect the claim of the complainant.

11.       Ext.B1 is the policy issued by the opposite party to the complainant. Page 1 of Ext.B1 has the inventory of the property insured. The schedule shows the inventory as an excavator. Premium paid is shown as Rs.8,434/-. Adding GST and flood cess, the total adds upto Rs.10,036/-.

12.       Page 6 of Ext.B1 is the tax invoice issued by OP to the complainant.  The amount paid is the same as shown in the policy certificate.

13.       Page 8 of Ext.B1 is the first page of Standard Policy Form containing the terms and conditions under which Ext.B1 is issued. The 2^nd paragraph deals with the coverage. The 5^th line states that the policy shall apply to the insured items whether they are at work or at rest.

14.       In Condition 3 clause (h) (running page 9 of Ext.B1), it is stated clearly that loss or damage while in transit from one location to another location is not payable. Further it is clearly stated in parenthesis that public liability will not be payable while contractor’s plant and machineries are on public road.  

15.       Thus, it is clear that what is being covered under Ext.B1 policy is only the machinery shown in the schedule on the 1^st page of policy certificate ie. the excavator. 3^rd party damages are not covered.

2)        The accident occurred outside the premises wherein the machinery was supposed to have been kept.

16.       As per 2^nd paragraph, in running page 7 of Ext.B1 (Standard Policy Form), the company will, at its own option by payment or reinstatement or repair, indemnify the insured against unforeseen and sudden physical damage by any cause not herein after excluded to any insured properties specified in the attached schedule whilst at the location mentioned therein necessitating its immediate repair or replacement.

                        Therefore, the machinery is under coverage only when it is in the location specified in the schedule of Ext.B1. Location details is shown on the first page of Ext.B1. Address of the location is the address of the complainant’s premise.

17.       Admittedly, the accident occurred in a public road which is not covered under Ext.B1. Therefore, the complainant is not entitled to be indemnified on this ground also.

3)        The accident occurred due to substandard quality of the machinery which is not covered under the policy.

18.       It is the case of the complainant (as can be seen in lines 7 to 11 of  paragraph 4 and paragraph 5 of the memorandum of complaint)  that the accident occurred as a result of the substandard quality of the excavator attributable to the manufacturer of the complainant. The complainant has filed a complaint against the manufacturer. The OP holds that this is yet another ground which is excluded in Ext.B1. Condition (p) in clause 3 of Ext.B1 standard policy form excludes the insurer’s liability where the manufacturer is responsible either by law or by contract.  

19.       In so far as this contention of OP is concerned, we are unable to come to a conclusion that the cause of accident was merely a manufacturing defect attributable to the manufacturer. It is true that the complainant has raised such a pleading but such a pleading will not have a valid standing without being supported by cogent expert evidence.  

20.       Without having the manufacturer impleaded and the pleadings being judicially appreciated we are not in a position, in the facts and circumstances of the case, to put in record that the accident occurred as a result of any cause attributable to the manufacturer.

21.       Therefore, this contention of the O.P. cannot be considered without further evidence.

22.       Resultantly, based on the discussions and observations above,  we hold that the accident that occurred to the machinery is not covered under the policy. The OPs are not bound to indemnify the complainant.

             Issue No. 2

23.       Apropos the discussions and findings above we hold that the 2^nd issue need not be considered.   

            Issue No. 5,6 & 7

24.       There is no deficiency in service on the part of the OPs.  

25.       Complainant is not entitled to any reliefs sought for.

26.       In the facts and circumstances of the case, parties are directed to bear their respective costs.

27.       Holding thus, this complaint stands dismissed.

                         Pronounced in open court on this the 27^th  day of  June,  2024.

                             Sd/-                                                                                                                             

                                                                                                                                                  Vinay Menon V

                                                                                   President

                                                                                         Sd/-

                Krishnankutty N.K.

                                                                                                                                                   Member         

APPENDIX

Exhibits marked on the side of the complainant

Ext.A1   -  Copy  of policy certificate and collection receipt

Ext.A2  -    Copy of bill issued by KSEB  

Exhibits marked on the side of the opposite party:

Ext.B1   -   Copy of policy document.  

Court Exhibit:  Nil

Third party documents:  Nil

 Witness examined on the side of the complainant:  

PW1 – Jayeshkumar K.K. (Complainant)

Witness examined on the side of the opposite party:  Nil

Court Witness: Nil

NB : Parties are directed to take back all extra set of  documents submitted in the proceedings in accordance with Regulation 20(5) of the Consumer Protection (Consumer Commission Procedure) Regulations, 2020 failing which they will be weeded out.