Punjab

StateCommission

A/10/2064

M/s United India Insurance Company Ltd. - Complainant(s)

Versus

Singla Solvax - Opp.Party(s)

Raj Kumar Bashamboo

18 Feb 2015

ORDER

                                                               FIRST ADDITIONAL BENCH

 

STATE  CONSUMER  DISPUTES  REDRESSAL  COMMISSION,  PUNJAB

          SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.

                                     

                             First Appeal No.2064 of 2010

 

                                                          Date of Institution: 02.12.2010

                                                          Date of Decision : 18.02.2015

 

The United India Insurance Company Limited, Sangrur through Sh.Amin Kakkar, Deputy Manager, Regional Office, SCO No.123-124, Sector 17-B, Chandigarh, through duly constituted attorney

 

                                                                                                                                                 …..Appellant/Opposite party

         

                                      Versus

 

Singla Salvax Pvt.Ltd., Jakhal Road, Sunam, District Sangrur, through its Director and authorized signatory Sh.Mahinder Kumar

                                                                                                                                                                                                         ….Respondent/Complainant             

         

First Appeal against order dated 29.09.2010 passed by the District Consumer Disputes Redressal Forum, Sangrur.

Quorum:-

 

 

          Shri J. S. Klar, Presiding Judicial Member.

          Shri Vinod Kumar Gupta, Member.  

Present:-

 

          For the appellants            :         Sh.R.K.Bashamboo, Advocate

          For the respondent          :         Sh.H.S Saggu, Advocate

          . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

                  

J. S. KLAR, PRESIDING JUDICIAL MEMBER:-

                            

           The appellant (the OP in the complaint) has directed this appeal against the respondent in this appeal (the complainant in the complaint) challenging the order dated 29.09.2010 of District Consumer Disputes Redressal Forum Sangrur, accepting the complaint of the respondent in this appeal directing the appellant to pay compensation of Rs.7,57,440/- to the complainant. The instant appeal has been preferred against the same by OP now appellant.

2.      The complainant Singla Solvex Pvt.Ltd through its Director Mohinder Kumar has filed this complaint U/s 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the OP on the allegations that it purchased fire and earthquake policy vide cover note no.844847 dated 24.11.2008 from OP for the period 25.11.2008 to 24.11.2009 for a sum of Rs.1,15,00,000/-. The OP insured the building, machinery, stock of rice bran, sunflower, mustard seeds, groundnut and other similar stock like DOC and their bye products or Bardana, which was stored in the godown and  in open compound in factory premises. The complainant paid premium of Rs.25,843/- to OP. The de oil rice bran, rice bran oil etc. was insured. The complainant insured stock on the asking of its banker State Bank of Patiala, Branch Sunam. The complainant obtained the policy of Rs.80,00,000/-, vide cover note no.922135 dated 1.5.2009 for the period 5.5.2009 to 4.5.2010 and above said material was insured. Unfortunately, fire broke out in the above premises and stock of bags of DOC was affected badly and with the great efforts of the fire brigade, it was controlled within 14 hours. The complainant suffered loss of de oil rice bran and on 15.11.2009, the stock of de oil rice bran was 22115 qtl and 53 kgs, which was destroyed.  72 wooden crates were also destroyed and huge quantity of bardana  also stood destroyed. The rate of wooden crate was Rs.400/- per crate and bardana was Rs.10/- per bag. The complainant maintained the account books and stock record regularly in due course. The opening balance as per stock register was 22115 qtls of DORB. The rate of DORB on 15.5.2009 was 156 qtl. There was loss of 2300 qtl  DORB and there was balance of 19658 qtl in the premises. The rate of DORB on 15.5.2009 was Rs.435/- per qtl. The other stock of DORB was partly destroyed and the same was to be sold by the complainant on lesser rates. Intimation was given to the OP about this incident of fire, besides lodging the police report. The OP/insurance company repudiated the claim of the complainant, vide letter dated 15.01.2010 on unsolid grounds. The complainant has, thus, filed the present complaint against the OP directing them to pay Rs.10,00,500/- i.e. cost of 2300 qts DORB @ Rs.435/- per qtl and Rs.5,66,260.80, as loss suffered by the complainant along with interest 12% p.a besides compensation of Rs.1,00,000/- for mental harassment and Rs.22,000/- as costs of litigation.

3.      Upon notice, OP appeared, filed written reply and contested the complaint of the complainant. It was averred in reply by OP that complainant obtained Standard Fire and Special Perils Policy No. 111784/11/08/11/00000051 for the period of insurance from 25.11.2008 to 24.11.2009 for a sum of Rs.1,15,00,000/- for fire and earthquake, the building including chimni was insured for Rs.20 lacs, machinery for Rs.45 lacs and stocks for Rs.50 lacs. It was admitted that stock of rice bran, sunflower, mustard seeds, groundnut and other similar stock like DOC or thereby products or Bardana lying in the open compound by the complainant was insured.   It was further averred that complainant obtained  another policy for  Rs.80  lacs for Standard Fire and Special perils policy no. 111784/11/09/11/00000015  for the period from 05.05.2009 to 04.05.2010 for fire and earthquake. It is further admitted that complainant suffered loss of DOC due to spontaneous combustion and due intimation was given by it to OP. That Swadesh Pal Goyal was appointed as surveyor, who inspected the spot and submitted the report of loss to the tune of Rs.2,47,495/- due to spontaneous combustion. That police report no.30 dated 15.5.2009 was lodged by the complainant at police station, Sunam and it also reported that fire erupted suddenly and naturally due to heat of the chakkas. It was further averred that spontaneous combustion is not covered under the contract of insurance because it is not a part of the definition of 'fire' as defined in the insurance contract. The OP emphatically pleaded that it is part of the contract between the parties and spontaneous combustion is not part of the contract between the parties, hence, claim of the complainant was rightly repudiated by the OP and OP prayed for dismissal of the present complaint.

4.      The complainant tendered in evidence affidavit of Mohinder Kumar, Director of Complainant Firm Ex.C-1, affidavit of Des Raj Ex.C-2, copy of police report Ex.C-3, copy of repudiation letter dated 15.1.2010 from OP to complainant Ex.C-4, copy of insurance cover note Ex.C-5 and Ex.C-6, copy of detail of loss Ex.C-7, copies of bills Ex.C-8 to Ex.C-31, copy of stock register Ex.C-32, copy of resolution Ex.C-33, copy of letter Ex.C-34, copy of stock detail Ex.C-35, copies of letters Ex.C-36 to Ex.C-39, report of fire brigade Ex.C-40. As against it, OPs tendered in evidence affidavit of Satish Kumar Garg, Incharge Micro Office Ex.R-1, copy of Standard Fire and Special Perils Policy Ex.R-2 and Ex.R-3, copy of claim form Ex.R-4, copy of report Ex.R-5.  On conclusion of evidence and arguments, the District Forum, Sangrur accepted the complaint of the complainant directing the OPs to pay the amount of Rs.7,57,440/- as insurance claim along with interest @ 9% per annum from the date of repudiation i.e. 15.01.2010 till its realization besides cost of litigation of Rs.5,000/-. Dissatisfied with the order of the District Forum, the OP now appellant has preferred this appeal against the same.

5.      We have heard Ld.Counsel for the parties and have also examined the record of the case.   The affidavit of Mohinder Kumar, Director  of the complainant/company Ex.C-1 is on the record. This affidavit is verbatim reproduction of the version, contained in the complaint by him on oath. Affidavit of Des Raj, Accountant of the complainant company Ex.C-2 is on the record. This affidavit is also reproduction of the version of the complainant on oath. Ex.C-3 is the copy of the police report No.13 dated 15.5.2009 lodged at police station, Sunam regarding spreading of fire at the factory premises. It is recorded in the police report Ex.C-3 that fire broke out suddenly and naturally. Ex.C-4 is loss of stock on 15.5.09 sent to the complainant to the effect that as per the survey report, the loss was due to spontaneous combustion, which is not covered in the contract of insurance. This letter was sent by the OP to complainant on 15.5.2010. Ex.C-5 is contract of insurance, Ex.C-6 is cover note, Ex.C-7 is the stock statement coupled with the bills Ex.C-8 to Ex.C-30 on the record of the complainant. Ex.C-32 is statement, Ex.C-33 is resolution passed by the complainant confirming the authority of Mohinder Kumar to prosecute the case. Ex.C-34 is intimation sent to Fire Officer, Sangrur about the fire. Ex.C-35 to Ex.C-37 are documents of the complainant about spreading of fire naturally. Similarly, Ex.C-38 and Ex.C-39 may also be referred in this regard. Ex.C-40 fire caused report of the office of Fire Brigade, Sangrur it has recorded that fire caused damaged to the stock.

6.      The sheet-anchor of the case of the complainant is on the above referred documents. On the other hand, OPs stoutly relied upon the affidavit of Satish Kumar Garg, Incharge Micro Office of the OP. He admitted the fact of issuance of insurance also against premium for Fire, Perils and Earthquake. He stated in his affidavit that there was no contract of insurance between the parties covering the point of spontaneous combustion in this case. That it is outside the purview of the insurance contract between the parties. He further stated in his affidavit that Swadesh Pal Goyal surveyor, who inspected the spot of the complainant has found the loss of Rs.2,47,495/- due to spontaneous combustion. He further stated that spontaneous combustion is not part of the contract of the insurance between the parties. Ex.R-2 to Ex.R-4 are insurance policy documents, Ex.R-5 is survey and  loss assessment report sent to OP No.2 through its Divisional Manager, United India Insurance Company.

7.      The only point raised before us in this appeal by the OP now appellant is that spontaneous combustion was not the part of the contract of insurance between the parties and as such insurance claim of the complainant has been rightly repudiated by the OP. Much emphasis has been laid on this point by appellant that it is outside the purview of the insurance contract between the parties. Hence, the claim of the complainant stood repudiated. We find that there is no dispute with regard to other factual matrix of the case. There is no dispute regarding the fact of taking insurance policy for special perils by the complainant from the OP against premium. Policy was in operation at the time of this incident of fire, there is also no record for breaking out of fire and loss of the stock other than spontaneous combustion. The surveyor Swadesh Pal Goyal was appointed by the OP, who also found the loss of the stock due to fire and assessed a sum of Rs.2,47,495/-. We are of this view that the parties are not in dispute over the other matters in this regard.

8.      The dispute is confined to this point by the OP in appeal that spontaneous combustion is not part of the contract of insurance between the parties. Hence, the OP is duly justified in repudiating the claim of the insurance. We have to read the contract of insurance between the parties in this case. The policy document Ex.R-2 is on the record, this is Standard Fire and Special Perils Policy, (material damaged) fire has been defined as "excluding destruction or damage caused to the property insured by insurer due to its own fermentation, natural heating or spontaneous combustion even in the definition of the 'fire', which has not an exclusion of the contract of insurance in the main contract.  The spontaneous combustion is not part of the fire as per the policy document Ex.R-2 which  is a contract of insurance between the parties. The complainant should have been cautious in reading the contract of insurance before taking the policy. Spontaneous combustion has not been part of the fire ,as per policy document Ex.R-2 on the record. On this point, the counsel for the complainant  referred to law laid down in case titled as New India Assurance Company Ltd… Vs.. Taj Sugar Works and Another reported in II(2002) CPJ 43 (NC), it has been held in this authority that Commission has come to the conclusion that spontaneous combustion is covered under the definition of word "fire". The matter was taken to Hon'ble Supreme Court in an appeal where the case was remanded by Supreme Court and Supreme Court has not decided this point finally as to whether spontaneous combustion is not fire as defined in the Contract of Insurance, as gathered from the cited authorities by us. The matter has not yet been decided finally by the Apex Court and Apex Court only remanded this case to the National Commission for fresh adjudication. The complainant also referred to law laid down in the case titled as Roshan Lal Oils Mills Ltd…Vs. United India Insurance Company Ltd, reported in III(2008) CPJ 137 (NC) to the effect that loss due to fire, one part of policy and second part covers loss due to fermentation, natural heating or spontaneous combustion seeds damaged due to spontaneous combustion proved.  This authority is distinguishable on the face of it. In the cited authority, it was specifically covered by the contract of insurance as the second part thereof covered loss due to fermentation, natural heating or spontaneous combustion.  Consequently, not much benefit can be had by the complainant from this authority. Reference was also made to law laid down by Apex Court in case titled as United India Insurance Company Ltd.. Vs. Harchand Rai Chandan Lal reported in IV(2004) CPJ 15(SC), wherein Apex Court has held that the policy is contract between the parties and both parties are bound by terms of the contract, as held in the above authority. The policy covered burglary and theft  preceded by force only in the cited authority. It was the basic contract between the parties and parties were bound by the same. As per the law of the Apex Court laid down in the above referred authority United India Insurance Vs. Harchand Rai Chandan Lal ,(supra) we are of this view the parties are bound by the contract of the insurance herein and cannot travel beyond it.

9       The policy was taken by the complainant for the period from 25.11.2008 to 24.11.2008 and the insurance company amended the definition of the fire specifically covering in the contract that spontaneous combustion is not part of the fire, as defined in the contract of the insurance and it does not fall in the exclusion clause, but the basic part of the contract of the insurance, vide Ex.R-2  on the record. Spontaneous combustion has not been a part of the fire as per the contract of the insurance Ex.R-2 is on the record between the parties.

10.    Undoubtedly, the complainant suffered damage and surveyor of the OP appointed in this regard also found the loss of Rs. 2,47,495/- to this effect. This Forum is bound by the law on this point and by the terms of the contract between the parties. The parties cannot travel beyond the contract of the insurance and are strictly bound by the same. Herein, spontaneous combustion is not part of the fire, as defined in the basic contract of insurance Ex.R-2. The police report lodged by the complainant, vide Ex.C-30 is on the record stating that it was spontaneous combustion. Consequently, we record this view after appreciating the evidence of the record that spontaneous combustion is not part of the basic contract because the policy in this case was taken by the complainant from OPs, much time after the announcement of the judgment of the N.C in case Murli Agro Products Ltd Vs. Oriental Insurance Company Ltd reported in 1(2005)CPJ1 (NC) and the OPs amended the definition of fire in the present contract of insurance.

11.    In the light of our above discussion, we hold that spontaneous combustion is not part of the definition of the fire and is not a contract between the parties. Consequently, the OPs are justified in repudiating the claim of the complainant on the ground that it dehors the terms of the contract of the insurance.

12.    As result of our above discussion order of the District Forum under appeal cannot be sustained and is liable to be set aside in this appeal. We accept the appeal of the appellant and set aside the order of the District Forum Sangrur and the complaint of the complainant stands dismissed leaving the parties to bear their own costs.

13.    The appellant had deposited an amount of Rs.25,000/- at the time of filing the appeal. This amount with interest, if any, accrued thereon be refunded by the registry to the appellant by way of crossed cheque/demand draft after  45 days from receipt of copy of this order.

14.     Arguments in this appeal were heard on 13.02.2015 and the order was reserved. Now the order be communicated to the parties.

15.    The appeal could not be decided within the statutory period due to heavy pendency of court cases.

 

                                                                          (J. S. KLAR)

                                                             PRESIDING JUDICIAL MEMBER

                       

                                                                   (VINOD KUMAR GUPTA)

                                                                          MEMBER

February,  18  2015.                                                                

(ravi)