Haryana

StateCommission

A/375/2015

ORIENTAL INSURANCE CO. - Complainant(s)

Versus

SHREE NATH JI PLY PRODUCTS - Opp.Party(s)

J.P.NAHAR

28 Oct 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeal No  :       375 of 2015

Date of Institution:       24.04.2015

Date of Decision :        28.10.2015

 

1.     The Oriental Insurance Company Limited, Divisional Office, Opposite Madhu Hotel, Jagadhri Road, Yamuna Nagar, through its Divisional Manager.

 

2.     Shri Pankaj Goel, Surveyor, Resident of House No.947, Sector-17, HUDA, Jagadhri.

 

3.     Shri R.S. Kalra, Divisional Manager, The Oriental Insurance Company Limited, Divisional Office, Opposite Madhu Hotel, Jagadhri Road, Yamuna Nagar.

 

4.     Shri S. Rajesh, ADM, The Oriental Insurance Company Limited, Divisional Office, Opposite Madhu Hotel, Jagadhri Road, Yamuna Nagar.

         All through their authorized signatory S.P. Singh, Regional Manager, LIC Building, Jagadhri Road, Ambala Cantt.

 

                                      Appellants-Opposite Parties

Versus

 

M/s Shree Nath Ji Ply Products, Chhachhrauli Road, Village Mukarabpur, Jagadhri, District Yamuna Nagar through its partner Shri Inder Kumar Mongia.

                                      Respondent-Complainant

 

CORAM:             Hon’ble Mr. Justice Nawab Singh, President.

                             Mr. B.M. Bedi, Judicial Member.

                                                                                                         

Present:               Shri J.P. Nahar, Advocate for appellants.

                             Shri A.S. Khara, Advocate for respondent.

 

                                                   O R D E R

 

B.M. BEDI, JUDICIAL MEMBER

 

The Oriental Insurance Company Limited (for short ‘the Insurance Company’) and others –Opposite Parties, are in appeal against the order dated January 7^th, 2015, passed by District Consumer Disputes Redressal Forum, Yamuna Nagar (for short ‘the District Forum’).

2.           M/s Shree Nath Ji Ply Products-complainant-respondent, got its business premises insured with the Insurance Company vide Insurance Policy Annexure C-2 for Rs.1.30 crore. On July 11^th, 2010, flood water entered the insured premises due to which the eastern wall of the factory collapsed. The matter was reported to the Police vide D.D.R. No.6 dated 11.07.2010 (Annexure C-3). The Insurance Company was informed. The surveyor of the Insurance Company inspected the insured premises. The Insurance Company paid Rs.59,715/- to the complainant in view of the report (Annexure C-7) submitted by Shri A.K. Sood, Surveyor. However, as per the report of Government Approved valuer, Shri Hem Chand Goel, the complainant suffered loss worth Rs.91,856/-.  The complainant filed complaint under Section 12 of the Consumer Protection Act, 1986 (for short ‘the Act’).

3.      The complaint was contested by the Opposite Parties by filing reply denying the plea of the complainant.

4.      On appraisal of the pleadings and the evidence produced by the parties, the District Forum accepted complaint directing the opposite parties as under:-

“(a)    To release the insurance claim amounting to Rs.91,856/- (Ninety one thousand eight hundred fifty six only) to the complainant firm alongwith simple interest @ 9% per annum from the date of institution of complaint to the date of decision.

(b)     To pay Rs.10,000/- as compensation on account of harassment & mental agony etc caused to the complainant for a long period of about 4 years (i.e. from the date of loss to till the date of decision) by the negligent act of the insurance company.

(c)     To pay Rs.10,000/- as punitive damages on account of unfair trade practice committed by the OP insurance company by wrongly repudiating the claim of the complainant firm.

(d)     To pay Rs.5,000/- as costs for unwanted litigation including the advocates fee etc.

The aforesaid directions must be complied with by the OP-Insurance Company within the stipulated period otherwise all the aforesaid awarded amounts shall attract further simple interest @ 12% per annum for the period of default. The complaint is decided accordingly in the above terms.”

5.      It is not disputed that flood water had entered into the insured premises of the complainant. It is also not in dispute that eastern wall of the factory premises had collapsed due to flood water. The Insurance Company is denying complainant’s claim on the ground that the same was not covered under the policy in view of exclusion clause as the boundary wall was constructed in Mud Mortar.

6.      The contention raised is not tenable in view of the report (annexure C-7) prepared by Shri A.K. Sood, surveyor of the Insurance Company. The relevant part of the report reproduced as under:-

“Salvage:   The fallen boundary wall was found built up in cement mortar. The maximum numbers of bricks had been broken as the boundary wall fell and sound quantity of bricks is difficult to be salvaged from the fallen boundary wall. Moreover the bricks in cement mortar are difficult to be salvaged and cannot be reused in the construction of new boundary wall. Hence the bricks of fallen boundary wall do not carry much of salvage value………”

 

7.      The other aspect of the case is that the Insurance Company has failed to prove that the terms and conditions were the part of the Insurance Policy and the same were supplied to the complainant at the time of obtaining the policy. Since the terms and conditions of the policy wherein the exclusion clause was included, were neither a part of the contract of insurance nor disclosed to the complainant, the Insurance Company cannot claim the benefit of the said exclusion clause.

8.      Hon’ble Supreme Court in Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd. (2000) 2 SCC 734 has specifically held that Exclusion Clauses, which are not explained to the insured, are not binding to the insured and are required to be ignored.  The Court in para 9 held as under:

          “9.     In view of the above settled position of law we are of the opinion that the view expressed by the National Commission is not correct. As the above terms and conditions of the standard policy wherein the exclusion clause was included, were neither a part of the contract of insurance nor disclosed to the Appellant, the Respondent cannot claim the benefit of the said exclusion clause. Therefore, the finding of the National Commission is untenable in law”.

9.      From the Regulations as well as the settled principle of law, if Exclusion Clauses are not explained, they are not binding on the insured.  Those exclusion clauses are required to be ignored while considering the claim of the insured. In this view of the matter this Commission does not find any ground to interfere with the impugned order.

10.    Hence, the appeal is dismissed.

11.    The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the complainant against proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.

 

Announced: 28.10.2015

(B.M. Bedi) Judicial Member

(Nawab Singh) President

 

CL