Per Justice Sham Sunder,President The facts, in brief, are that that the complainant company situated in Plot No.83, HPSIDC, Industrial Area, Baddi, District Solan(HP), is running a non-woven fabric manufacturing unit. The complainant had purchased a Standard Fire and Special Perils Policy, bearing No.350162/11/00/11/00000/145, for the period from 12.10.2009 to 11.10.2010 and paid the requisite premium, which was accepted by the Insurance Company. As per the cover note issued to the complainant, at the time of taking the policy, the building was insured for Rs. one crore whereas the stocks, plant and the machinery, as also its contents were insured for Rs.19 crores. As per certificate of the policy, the description of risk, which was undertaken to be indemnified by OP, was as under ; “Description of Risk:- On Plant and Machinery/Tools tackles/Fixtures and Accessories to the extent of Rs.14 crore/Or on building including boundary wall/gates/office.” 2. A fire broke out, in the said factory, on 7.10.2010, at around 1.15 P.M ,on account of short circuit, in the UPS (Uninterrupted Power Supply) installed therein. The value of the UPS damaged, in the fire, amounted to Rs.24 Lacs. The fire loss in the UPS was reported to the OP. However, the claim made by the complainant, was not settled. Ultimately, the complainant received a letter dated 2.3.2010, sent by Engineer Jasvinder S.Josan, for and on behalf of Joshan and Associates, Surveyors and Loss Assessors, which referred to the General Exclusions of the Policy. The OP disowned its liability to pay the amount of loss, occurred due to the damage caused to the UPS, on the ground, that the said loss was excluded from the scope of the coverage of the policy. On receipt of the letter dated 2.3.2010, the complainant sent reply vide letters dated 8.3.10 and 15.3.2010, intimating that the plea of the OP, regarding General Exclusions, was not tenable. It was further stated that in C-1, the policy, which was supplied to the complainant, no indication was made with regard to General Exclusions, as mentioned in the letter dated 2.3.2010. It was further stated that the UPS, which was a part of the plant and machinery and accessories of the industry, could not be excluded from the scope of the coverage of the policy. It was further stated that even the terms and conditions of the policy were not supplied, either at the time of issuance of C-1, or later on, to the complainant. It was further stated that, since the terms and conditions of the policy were not supplied, at any point of time, to the complainant, the repudiation of the claim, made by the OP, grounding the same, on the General Exclusions, was completely invalid. It was further stated that the complainant was mentally harassed, as also suffered financial loss due to the willful neglect and the arbitrary attitude of the OP, in disallowing the claim made by it. It was further stated that the OP was deficient in rendering the service to the complainant. Ultimately, the instant complaint, was filed by the complainant, claiming therein, that the OP be directed to pay the amount of loss of UPS, occurred in the fire, amounting to Rs.24.00 Lacs; to pay an amount of Rs.one lac, as compensation, towards harassment, mental agony and physical pain ; and to pay an amount of Rs.20,000/- towards litigation expenses, with interest @ 24% p.a. 3. In the written reply filed by the OP, it was pleaded that this Commission has got no jurisdiction to entertain and decide the complaint, as there was no deficiency in rendering the service by it, to the complainant. It was admitted that the policy of insurance known as “Standard Fire and Special Perils Policy” was obtained by the complainant and the same was valid for the period from 12.10.2009 to 11.10.2010. It was also admitted that the policy covered various risks which were insured for the amount, detailed by the complainant, in the complaint. It was further stated that, due to the fire, which broke out, in the factory premises of the complainant, on account of short circuit, the damage was only confined to the UPS. It was further stated that since the damage occurred only to the UPS, the same was not covered under the terms and conditions of the policy. It was further stated that the Standard Fire and Special Perils Policy included all the terms and conditions, as also the exclusions. It was further stated that these being the standard conditions, were not required to be recited, at the time of issuance of the cover note. It was further stated that, under the provisions of law, it was presumed that the insured knew the standard terms and conditions, as these were issued as a general practice. It was further stated that the contract of insurance was a species of commercial transactions and it was a well established commercial practice, to send cover notes, even prior to the completion of a proper proposal, or while the proposal was being considered or a policy was in preparation for delivery. It was further stated that a cover note was a temporary and limited agreement, which may be self-contained, or it may incorporate by reference the terms and conditions of the future policy. It was further stated that the terms and conditions of the policy were supplied to the complainant. It was further stated that, since the claim made by the complainant, was with regard to damage to the UPS only, it fell within the purview of the ‘Exclusion Clauses’ of the terms and conditions of the Policy. It was further stated that a surveyor who was appointed gave his report R-2, wherein he concluded that such loss was excluded as per General Exclusions of the terms and conditions of the Policy. It was further stated that the claim of the complainant was validly repudiated, vide Annexure R-3, copy of the letter sent to it, in consonance with the Exclusion Clauses of the terms and conditions of the aforesaid Policy. 4. In support of its claim, the complainant led evidence by way of affidavit of Sh.Suresh Mittal, its Director, who testified, in consonance with the averments contained in the complaint. C-A is the copy of Resolution, vide which Suresh Mittal was duly authorized to appear, on behalf of the complainant and file the affidavit. C-1 is copy of the Policy/cover note, which was supplied to the complainant, at the time of insurance. C-3 is the copy of letter, which was written by Joshan & Associates, Chartered Engineers to the complainant, stating therein, that the claim made by it, was not tenable in view of the Exclusion Clauses of the policy. 5. The OP, in support of its case, produced the evidence by way of affidavit of Sh.K.B.Bindal, its officer. R-1 is copy of the policy, with which the terms and conditions of the said policy were attached. R-2 is the report of the surveyor. R-3 is the letter dated 17.3.2010, which was written to the complainant Company vide which its claim was repudiated. 6. An application dated 3.3.2011 for additional evidence for tendering into evidence the affidavit of the surveyor in support of R-2, his report, was filed. It was stated that inspite of due diligence, the affidavit of the surveyor could not be filed earlier. It was further stated that no prejudice would be caused to the complainant, in case, the affidavit by way of additional evidence of the surveyor was allowed to be placed on record. 7. No reply to this application, was filed by the complainant. 8. We have heard the learned Counsel for the parties, and have gone through the evidence and n record of the case carefully. 9. The Counsel for the complainant, submitted that, since the terms and conditions of the Policy were not supplied to the complainant, at any point of time and only C-1, one page of the policy/cover note was supplied, which did not contain the terms and conditions of the said policy, it (complainant) was not bound by the same. He further submitted that in case the OP wanted to take shelter of the Exclusion Clauses, contained in the terms and conditions of the policy, it was required of it, to supply the same, either at the time of issuance of C-1, or later on. He further submitted that the complainant was not supposed to know the terms and conditions of the policy, in the absence of supply of the same. He further submitted that the UPS, which was damaged, on account of fire due to short-circuit was also a part and parcel of the machinery and, as such, the claim of the complainant did not fall within the purview of the Exclusion Clauses. He further submitted that the claim of the complainant was illegally repudiated by the OP. With regard to the application for additional evidence for producing the affidavit of the surveyor, in support of the report R-2, already placed on the file, the Counsel for the complainant did not say anything. He further submitted that, since the claim of the complainant was illegally repudiated, by the OP, it was entitled to the amount, claimed by it, in the complaint. 10. On the other hand, the Counsel for the OP, submitted that in C-1 the policy/cover note, which was supplied to the complainant, at the time of obtaining the insurance by it, there was a clear-cut indication that it was a “Standard Fire and Special Perils Policy”. He further submitted that even, in C-1, clearly stated that the insurance under this policy was subject to warranties & clauses (as per forms attached) & is extended to cover risks of (as per forms attached). He further submitted that this clearly goes to reveal that all the terms and conditions of the policy were supplied to the complainant, at the time, it obtained insurance. He further submitted that, in case, the terms and conditions had not been supplied, as claimed by the complainant, it could lodge a protest with the OP, or write a letter to it, that it be supplied the same. He further submitted that neither any protest was lodged, nor any letter was written regarding the non-supply of the terms and conditions. He further submitted that, even if, it is assumed for the sake of arguments, that the terms and conditions of the policy were not supplied to the complainant, it was supposed to know the terms and conditions thereof, including the General Exclusions, as it was a “Standard Fire and Special Perils Policy”. He also placed reliance on General Assurance Society Ltd., Appellants Vs Chanmull Jain and another, respondents, AIR 1966 Supreme Court 1644, in support of his foregoing contentions. He further submitted that, since the loss was confined to UPS only, on account of the fire, which broke out, it fell within the General Exclusions, and, as such the claim of the complainant was rightly repudiated. He further submitted that the additional evidence was essential for the just decision of the case, and to enable the Commission to pronounce the judgment, in a satisfactory manner. 11. The following points/questions arise for determination, in the instant complaint ; (i) Whether the complainant was supplied the terms and conditions of the Standard Fire and Special Perils Policy, which it obtained from the OP ? (ii)Even if, it is assumed for the sake of arguments, that such terms and conditions were not supplied to the complainant, whether he was supposed to know the same and, therefore, could not wriggle out therefrom. (iii)Whether the OP, legally and validly, repudiated the claim made by the complainant? (iv)Whether the OP was deficient, in rendering the service, to the complainant, by repudiating its claim ? (v)Whether the complainant is entitled to the amount claimed by it, in the complaint? 12. First, coming to the application, for additional evidence, it may be stated here, that the same is liable to be accepted for the reasons to be recorded hereinafter. No doubt, no party can be allowed to fill in the lacuna, in its evidence, at a belated stage. However, if the Commission comes to the conclusion, that the additional evidence, which is sought to be produced, does not relate to the fabricated document, and is essential for the just decision of the case, and to enable the Commission to pronounce the judgment, in a satisfactory manner, the same can be allowed, even at the belated stage. In the instant case, the report of the surveyor R-2, was submitted by the OP, at the time it was leading evidence. Even the claim of the complainant was repudiated by the OP, on the basis of the report R-2 of the surveyor, which contained that the same(claim) was not tenable, on account of General Exclusions of the terms and conditions of the Policy. This document, therefore, could not be said to be forged and fabricated one. If, in support of R-2, the affidavit of the Surveyor could not be submitted earlier, that does not mean that the evidence, which is essential, for the just decision of the case, should be shut. No prejudice, whatsoever, would be caused to the complainant, in case, the application is allowed as it was very well, in the know of the report of the surveyor, much earlier to the filing of the complaint. The affidavit of Er.Jasvinder S.Joshan, Chartered Engineers, Surveyor’s & Loss Assessors, in support of his report, in our considered opinion, is essential for the just decision of the case, and it shall also enable this Commission to pronounce the judgment in a satisfactory manner. The same is allowed to be placed on record by ways of additional evidence. 13. Now coming to the complaint, the first question, that falls for determination, is, as to whether, the terms and conditions of the policy, were supplied to the complainant or not ? C-1 is the document i.e. the insurance policy, upon which reliance was placed by the complainant. Admittedly, this document was given to the complainant, when it obtained the insurance policy/cover note . On the top of it, the words “Standard Fire and Special Perils Policy” are written. At the bottom of C-1, it was in clear-cut terms recited, that the insurance under this policy was subject to warranties & clauses(as per forms attached) & is extended to cover risks (as per forms attached). This clearly goes to show that the terms and conditions of the policy were attached with C-1. In the written reply, as also in the affidavit of Sh.K.B.Bindal, an officer/official of the OP, it was in clear-cut terms, stated that the terms and conditions of the policy, were supplied to the complainant. In case, the terms and conditions which were shown to be attached, with C-1, were not supplied to the complainant, it could lodge an oral or written protest, at that time. It could also write a letter to the OP that, since the terms and conditions of the ‘Standard Fire and Special Perils Policy’, which was obtained by it, had not been supplied to it, the same be supplied. At no point of time, any communication was sent, by the complainant, to the OP, for the purpose of supply of the terms and conditions of the policy. Even in C4 letter dated 8.3.2010, written by the complainant to the OP, in reply to the letter C3, sent by its(OP) surveyor, repudiating the claim on the basis of ‘General Exclusions’, no indication was made by it(complainant) that it was never supplied the terms and conditions of the Policy. It was only, for the first time, the complainant woke up out of its deep slumber and took up the plea, in the complaint filed in May,2010. It was thus, an after- thought plea, which was coined by the complainant, to claim the amount, from the Insurance Company. In these circumstances, the submission of the Counsel for the complainant, to the effect that, since the terms and conditions of the policy, were not supplied to the complainant, it was not bound by the General Exclusions of the same, does not merit acceptance, and the same deserves to be rejected. The first question/point posed hereinbefore, is, thus, decided against the complainant, and in favour of the OP. 14. The next question, that arises for determination, is, even if, it is assumed, though not admitted, that such terms and conditions of the policy were not supplied to the complainant, whether it was supposed to know the same, and the Insurance Company could take the shelter of Exclusion Clauses contained in the policy to repudiate the claim ? In General Assurance Society Ltd., Vs Chandmull Jain and another’s case, (supra) decided by a Constitution Bench of the Hon’ble Supreme Court in paragraph-11, it was held as under ; “A contract of insurance is a species of commercial transactions and there is a well-established commercial- practice to send cover notes even prior to the completion of a proper proposal or while the proposal is being considered or a policy is in preparation for delivery. A cover note is a temporary and limited agreement. It may be self-contained or it may incorporate by reference the terms and conditions of the future policy. When the cover note incorporates the policy, in this manner, it does not have to recite the terms and conditions, but merely to refer to a particular standard policy. If the proposal is for a standard policy and the cover note refers to it, the assured is taken to have accepted the terms of that policy. The reference to the policy and its terms and conditions may be expressed in the proposal or the cover note or even in the letter of acceptance including the cover note. The incorporation of the terms and conditions of the policy may also arise from a combination of references, in two or more documents passing between the parties. Documents like the proposal, cover note, and the policy are commercial documents, and to interpret them commercial habits and practice cannot altogether be ignored. During the time the cover note operates, the relations of the parties are governed by its terms and conditions, if any, but more usually by the terms and conditions of the policy bargained for and to be issued. When this happens the terms of the policy are incipient but after the period of temporary cover, the relations are governed only by the terms and conditions of the policy unless insurance is declined in the meantime. Delay in issuing the policy makes no difference. The relations even then are governed by the future policy if the cover notes give sufficient indication that it would be so. In other respects there is no difference between a contract of insurance and any other contract except that in a contract of insurance there is a requirement of uberrima fides i.e., good faith on the part of the assured and the contract is likely to be construed contra proferentem that is against the company in case of ambiguity or doubt. A contract is formed when there is an unqualified acceptance of the proposal. Acceptance may be expressed in writing or it may even be implied if the insurer accepts the premium and retains it. In the case of the assured, a positive act on his part by which he recognises or seeks to enforce the policy amounts to an affirmation of it. This position was clearly recognised by the assured himself, because he wrote, close upon the expiry of the time of the cover notes, that either a policy should be issued to him before that period had expired or the cover note beextended in time. In interpreting documents relating to a contract of insurance, the duty of the Court is to interpret the words in which the contract is expressed by the parties because it is not for the Court to make a new contract, however, reasonable, if the parties have not made it themselves. Looking at the proposal, the letter of acceptance and the cover notes, it is clear that a contract, of insurance under the standard policy for fire and extended to ,cover flood, cyclone etc. had come into being.” 15. As stated above, in C-1 policy/cover note, which was issued to the complainant, there was a clear-cut recital, that the same was subject to the warranties & clauses(as per forms attached) & is extended to cover risks (as per forms attached). The Exclusion Clauses formed part and parcel of the terms and conditions of the ‘Standard Fire and Special Perils Policy’. In view of the principle of law, laid down, in General Assurance Society Ltd., Vs Chandmull Jain and another’s case(supra), it can be safely held, that, even if, it is assumed that the detailed terms and conditions of the policy were not allegedly supplied to the complainant, it was supposed to know the same it (policy) being a species of commercial transactions, and therefore, could not wriggle out of it. The principle of law, laid down, in General Assurance Society Ltd., Vs Chandmull Jain and another’s case(supra), is binding on this Commission. In this view of the matter, the second question/point is decided in favour of the OP. 16. The Counsel for the complainant, however, placed reliance on Shree Shyam Cold Storage Vs National Insurance Co. Ltd. & anr IV(2007) CPJ 386, decided by Rajasthan State Consumer Disputes Redressal Commission, Jaipur ; Ganesh Ram Chandrakar Vs Oriental Insurance Co. Ltd. II(2006)CPJ 296, decided by Chhattisgarh State Consumer Dispsutes Redressal Commission, Raipur, and M/s Modern Insulators Ltd. Vs M/s Oriental Insurance Co. Ltd., 2000(1)CPC 596, decided by the Apex court, in support of his contention that, in the absence of supply of terms and conditions of the policy, the complainant was not bound by the same and, therefore, its case did not fall under the General Exclusions. In Shree Shyam Cold Storage Vs National Insurance Co. Ltd. & anr’s case (supra), it was held by the Rajasthan State Consumer Disputes Redressal Commission, Jaipur, that the proximate and immediate cause for damage of the stock was fire and, as such, Exclusion Clause was not applicable. In these circumstances, it was held that the repudiation was wholly untenable, on the part of the OP, and, as such, the claim of the complainant was held tenable. In Ganesh Ram Chandrakar Vs Oriental Insurance Co. Ltd.’s case (supra), there was no endorsement, in the policy, showing that the terms and conditions were attached with the same, nor the same formed part and parcel of the policy. It was, in these circumstances, held that the insurer was not entitled to claim benefit of the exclusion clause. In M/s Modern Insulators Ltd. Vs M/s Oriental Insurance Co. Ltd. ‘s case (supra), decided by the Apex Court, it was held that if the exclusion clause was not included in the policy, nor disclosed to the insured, the same could not be made applicable. The facts of the Shree Shyam Cold Storage Vs National Insurance Co. Ltd. & anr’s case (supra) decided by the Rajasthan State Consumer Disputes Redressal Commission, Jaipur, are clearly distinguishable from the facts of the instant case. The principle of law, laid down, in Ganesh Ram Chandrakar Vs Oriental Insurance Co. Ltd.’s case (supra) decided by Chhattisgarh State Commission and M/s Modern Insulators Ltd. Vs M/s Oriental Insurance Co. Ltd.’s case (supra), decided by a smaller bench of the Apex court , running contrary to the principle of law, laid down, in General Assurance Society Ltd., Vs Chandmull Jain and another’s case (supra) , decided by a Constitution Bench of the Hon’ble Supreme Court, shall not hold the field. In these circumstances, no help, can be drawn, by the Counsel for the complainant, from the principle of law, laid down, in the cases, relied upon by him, and referred to in this paragraph. The submission of the Counsel for the complainant, therefore, being devoid of merit, must fail, and the same is rejected. 17. The next question, that falls for determination, is, as to whether, the OP legally and validly repudiated the claim of the complainant, taking shelter of the General Exclusions, forming part and parcel of the terms and conditions of the policy. It has been held above that the terms and conditions of the policy were supplied alongwith C-1, at the time the insurance, was obtained by the complainant. It was also held, hereinbefore that, even if, it is assumed for the sake of arguments that such terms and conditions were not supplied alongwith C-1, the complainant was supposed to know the same, as held in General Assurance Society Ltd., Vs Chandmull Jain and another’s case (supra). The documents like proposal form, cover note and the policy are commercial documents. The terms and conditions, contained therein are to be interpreted, as it is. The Commission, can neither add anything to the same nor can subtract therefrom anything. Strict interpretation of the terms and conditions of the policy is required to be made by the Commission. It is evident from the terms and conditions of the policy R-1 that it contains the General Exclusion Clauses under Para XII(A). Clause-7 of General Exclusions forming part and parcel of the terms and conditions of the Policy, reads as under ; “Loss, destruction or damage to any electrical machine, apparatus, fixture, or fitting arising from or occasioned by over-running, excessive pressure, short circuiting, arcing, self ‘heating or leakage of electricity from whatever clause(lightning included) provided that this exclusion shall apply only to the particular electrical machine, apparatus, fixture or fitting so affected and not to other machines, apparatus, fixtures or fittings which may be destroyed or damaged by fire so, set up. ” 18. It is evident from Clause-7 extracted above, of the terms and conditions of the policy R-1 that the loss, destruction or damage to any electrical machine, apparatus, fixture, or fitting arising from or occasioned by over-running, excessive pressure, short circuiting fall within the exclusion clause. Since, loss to the UPS only, on account of fire, which broke out in the factory premises of the complainant, due to short-circuit, fell within Clause 7(General Exclusions) of the terms and conditions of the policy, the OP was well within its right to repudiate the claim of the complainant. In these circumstances, repudiation of the claim made by the OP vide R-3, could be said to be legal and valid. It was not a special exclusion clause, which was not mentioned, in the terms and conditions of the policy. Had resort been made by the OP to a special exclusion clause, not forming part of the terms and conditions of the policy, without bringing the same to the notice of the complainant, the matter would have been different. Since, the claim of the complainant fell within the General Exclusions of the terms and conditions of the policy and it was legally and validly repudiated by the OP, there was no deficiency in rendering service by it(OP). These questions/points are decided, in favour of the OP and against the complainant. 19. No doubt, in R2 report, the surveyor came to the conclusion that the loss which occurred on account of fire to the UPS only, was to the tune of Rs.10,43,959.19paise. Since, it has been held above that the OP, legally and validly repudiated the claim of the complainant vide R-3, in view of the General Exclusions, forming part of the terms and conditions of the policy, it (complainant) was not at all entitled to claim any amount, depicted in the complaint. This question/point is decided, against the complainant and in favour of the OP. 20. For the reasons, recorded above, the complaint, being devoid of merit, must fail, and the same is dismissed with costs, quantified at Rs.5000/-.
| | HON'BLE MR. JAGROOP SINGH MAHAL, MEMBER | HON'BLE MR. JUSTICE SHAM SUNDER, PRESIDENT | , | |
