Ramesh Bawri, Actg. President- The facts of the case, in brief, are that the Complainant who is the Respondent in this Appeal (hereinafter referred to as the `Consumer') was running a Public Call Office (PCO) along with a General             Store at Shillong. She obtained a Shopkeepers Insurance Policy No.51908 effective from 17.5.2000 inter alia covering the risks of Fire and Allied Perils (Contents), the sum insured being Rs.90000/-, from the Appellant, Oriental Insurance Co. Ltd. (hereinafter referred to as the `Insurers').

 

2.         On 10.9.2000 a fire broke out in the insured premises, severely damaging the PCO Monitor and other instruments and the Consumer lodged a claim with the Insurers for the sum of Rs.29275/- being the repairing charges for the damaged machine. This claim was repudiated on 23.1.01 by the Insurers on various grounds whereupon the Consumer approached the learned District Forum, Shillong in Consumer Case No.6/2001 for redressal.

 

3.         Although the claim was contested by the Insurers, vide its order dated 23.1.02, the learned District Forum concluded that they were deficient in the services rendered by them and allowed the claim of the consumer. Hence this Appeal by the Insurance Co.

 

4.         We have perused the case records and have heard Shri V.K. Jindal, learned Senior Counsel for the Appellant Insurance Co. assisted by Shri L. Lyngdoh, Advocate. We have also heard Shri S.P. Sharma, learned counsel for the Respondent Consumer.

 

5.         The Appellants have assailed the impugned order dated 23.1.02 mainly on the ground that the nature of damage to the PCO machine was such that it was not covered by the         related Insurance Policy and hence the learned Forum erred in upholding the Consumer's claim. Shri Jindal has also based his arguments on the related Shopkeepers Insurance Policy issued by the Insurance Company where, in Section VII under the head "Baggage", it is stated thus:

                       

 

6.         In support of their case the Insurers also rely on the       Surveyors Report dated 4.1.01 which contains the following             findings: The proximate cause of loss is electrical/electronic breakdown of machines giving rise to           short circuit, fire etc. which are not covered under terms        and conditions of the Shopkeepers policy."

 

7.         It is claimed by the Appellants that in view of the           afore-mentioned exclusion clause contained in Section VII of the Policy and based on the findings of the Surveyor that the PCO machine was damaged in a fire caused by an             internal short-circuit, the loss was not covered by the Policy.

 

8.         On the other hand, Shri S.P. Sharma, learned Counsel for the Consumer, argues that Section VII of the Policy has no application whatsoever to the case at hand and relates only to "Baggage". The correct section of the Policy under             which the claim falls is Section I, covering Building and its contents and there is no exception clause for losses             caused by short circuit, as in the case of "Baggage"        contained in Section VII.

 

9.         Even a cursory glance at the Policy reveals that the        stand taken by the Insurance Co. is totally misplaced and             untenable. The Policy is a multi-purpose omnibus document covering several types and forms of risks under different sections, as listed below, all in relation to a shopkeeper's activities and assets.

 

 

 

                        Section                         In respect of loss and damage to:

                       

 I                                  Building/Contents

                         II                                 Burglary and House Breaking

                         III                               Money Insurance

                         IV                               Pedal Cycles

                         V                                Plate Glass

                         VI                               Baggage

                         VIII                             Personal Accident

                         IX                               Fidelity Guarantee

                         X                                Public Liability

 

10.       As noticed above, the Consumer had insured the PCO Machine under the head "Fire and Allied Perils (Contents)" which clearly falls under Section I of the Policy relating to Building/Contents and not under Section VII thereof; Section VII, as the Policy itself states, only applies to "Baggage in connection with the trade accompanying the           Insured partner and/or Employees" etc. and does not have         even the remotest bearing on the claim. This is further    clear from the Hindi translation which reads: "Yatra Samaan jise vyapar ke sambandh mein bimakrit vyakti bhagidar tatha/athwa karmachari duara le jaya ja raha ho."

 

11.       Now, Section I clearly states that "The Company will indemnify the Insured in respect of loss of or damage to the Building/Contents whilst contained in the insured premises by "Fire, Light(n)ing, explosion of gas domestic          appliances ..... etc." Significantly, there is no special  exception/exclusion in respect of loss or damage to any electrical apparatus arising from short circuiting, similar       to the exclusion contained under Section VII of the Policy relating to Baggage. The concerned Section I covers all losses suffered by the Insured when caused by any fire, without any further condition as to the cause of the fire.

 

12.       The Surveyor has himself found that the PCO machine was damaged by fire. The Insurers have accepted the Survey Report and rather relied upon it. The certificates issued by the Superintendent of Police, Fire Service, Meghalaya as well O.C. Police Beat House, Pasteur Hills, Shillong re-confirm the occurrence of fire.

 

13.       Against this backdrop, the only discussion and finding of the learned Forum which is contained in Paras 12, 13 &             14 of its order and is in the following words:

 

 

In the pleadings also, OPs aver that `fire' in        insurance policies does not cover electrical or electronic            break down and short circuits. In the instant insurance policy it is evidently clear that the policy of Rs.            90,000/- covers the fire and allied perils for the PCO and the general stores. We cannot accept this argument also.

 

In the circumstances, we come to the conclusion that the insurance claim in this case falls very much within the    terms of the policy and not settling it when preferred is deficiency in service under the provisions of the Consumer Protection Act, 1986."

 

14.       We do agree with the learned Counsel for the Insurance Co. that the learned Forum totally failed to notice the             Report of the Surveyor as well as the exclusion clause  contained in Section VII of the Insurance Policy. These were the very basis and ground for repudiation of the claim        by the Insurance Co. and ought to have been given the consideration that they deserved. The reasons given by the learned Forum for arriving at its findings on this vital issue are indeed laconic.

 

15.       However, though the reasoning of the learned Forum is inadequate, we are in full agreement with its conclusion.In view of our above discussion, we are of the clear opinion, that the damage caused to the Consumer's PCO machine by fire is fully covered by the Insurance Policy and the Insurers cannot wriggle out of their liability arising therefrom.

 

16.       It may be stated here that Shri Jindal learned Sr. Counsel has also attempted to make a distinction between             losses caused owing to external short circuits and internal ones. His contention is that had the PCO machine been damaged owing to an external short-circuit, the loss would         have been covered by the Policy but since the short-circuit was internal, the Insurer was not liable. We however find           nothing in the Policy to substantiate and justify this distinction; as discussed above, as long as the damage was caused by fire, it mattered little whether the fire itself was triggered off by an external or internal short-circuit         or in any other way.

 

17.       The other grievance of the Insurance Co./ Appellant is that the relief granted by the learned Forum was not in             conformity either with the Surveyors Report nor with the provisions of Section 14 of the Consumer Protection Act,             1986. The Surveyor had assessed the loss at Rs. 14522/- but    the Forum awarded Rs. 29275/- to the Consumer being the cost of repair of the PCO machine, based on the Repairers Bill and Receipt dated 16.11.00 for Rs. 29275/-.

 

18.       We observe from the Surveyor's Report that he has       assessed the market value of the PCO machine and             accessories at Rs. 33610/- after providing for depreciation @10%. It is seen that the machine was purchased on 21.3.00 and the Insurance Policy was obtained on 17.5.00 whereas      the fire occurred on 10.9.00, that is hardly six months after the new machine was installed. Hence depreciation @ 10% as deducted by the Surveyor was quite adequate.             However, surprisingly, while assessing the loss, the same Surveyor in the same Report has deducted depreciation at 50% on the value of most of the components. We are totally      unable to understand how two different Standards and rates of depreciation could be adopted by the Surveyor-one for         assessing the market value at the time of occurance and             another to assess the loss. This cannot be upheld under any circumstances.

 

After providing for depreciation @ 10% the assessment of the Surveyor comes to about Rs.25,000/- against which the learned Forum preferred to rely on the cost of repair/replacement based on the actual bills and vouchers            produced before it. No fault can be found with this approach as the Consumer Fora are not bound by the Surveyor's Report although it carries a lot of weight. The assessment and award of Rs. 29275/- is therefore quite fair and reasonable and is upheld by us.

 

19.       Besides the sum of Rs. 29275/- which was awarded by it as the cost of repair of the damaged PCO machine, the learned Forum has also awarded to the Consumer interest @ 18% from the date of repudiation of the claim till the date of payment and an additional sum of Rs. 5000/- as compensation for repudiation of the claim on insufficient grounds. Shri V.K. Jindal contends that the Consumer Fora            have no power to grant both interest and compensation to         the Complainant under the Act.

 

20.       On the other hand Shri S.P. Sharma states that the        award is quite just and in accordance with law. He draws our attention to the decision of the Hon'ble National Commission reported in 1992 (2) CPR 445 (Lumax Industries -vs- United India Insurance Co. Ltd.) where, in addition to interest @ 18% p.a., compensation of Rs. 10000/- for the inconvenience and harassment caused to the Consumer by the Insurance Co. by unjustifiably withholding the claim amount             for a period of one and a half year, was also awarded.

 

21.       Section 14 of the C.P. Act empowers the District Forum to direct the Opposite Party to "pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the Consumer due to negligence of the Opposite Party." It is well settled that the word `Compensation' is of a very wide connotation. It may constitute actual loss or expected loss and may extend to compensation for physical, mental or even emotional suffering, insult or injury or loss. Consumer Fora are also entitled to compensate a Consumer for the injustice      suffered by him. The Hon'ble Supreme Court has, in its recent judgment reported in A.I.R. 2004 SC 2141 (Ghaziabad Development Authority -vs- Balbir Singh), laid down that  award of compensation must be under different separate rates and must vary from case to case depending on the facts of each case. From this decision too it is clear that the compensation is not limited to one head only.

 

22.       The interest awarded by the learned District Forum is clearly by way of compensation for the retention of the money owed by the Insurance Company to the Consumer in     terms of the policy whereas it can be clearly inferred that the sum of Rs. 5000/- has been awarded as compensation for the suffering caused to the consumer by repudiation of the claim on insufficient grounds. We are      therefore constrained to have to reject this ground raised           by the Appellants.

 

23.       Mr. Jindal further contends that no interest can be          awarded by the Forum in view of General Condition No. 11 of         the Policy which states that " No sum payable under this            Policy (shall) carry interest." He has cited before us             (1997) 2 SCC 469 (State of Orissa -Vs- B.N. Agarwalla) and (1999) 1 SCC 63 (State of U.P. -Vs- Harish Chandra & Co.) in support of his contention. The latter decision follows the former and hence it would be adequate for our purpose            to examine the Orissa case where, in Para 25, the Hon'ble Supreme Court held - "There can be no doubt that if the terms of the contract expressly stipulate that no interest would be payable then, notwithstanding the provisions of             the Interest Act,1978, an arbitrator would not get jurisdiction or right to award interest."

 

24.       It is seen that the aforesaid cases arose under the Arbitration Act, 1940 and not under the C.P. Act, 1986 with which we are presently concerned. The decision of the Hon'ble Apex Court cannot be read so widely as to include             within its orbit cases arising under each and every Act in            the country. Moreover, it has to be borne in mind that the interest awarded by the learned Forum is not an award of interest by an Arbitrator, nor is it under the provisions of the Interest Act,1978. The interest granted under the     C.P. Act, 1986 stands on a different footing altogether and the judgments cited by the learned senior counsel, although absolutely binding on us, can have no application to the instant case. Furthermore, even the bar to payment of interest, as contained in Condition No. 11 of the Policy,           applies only to payments made "under the Policy". Award of interest by the learned Forum is not "under the Policy" but is granted by the learned Forum under the provisions of the C.P. Act, 1986 and the Forum cannot be precluded from      exercising its jurisdiction by general condition No. 11 of the policy which is relied upon by the Appellants. We are therefore unable to grant any relief to the Appellants on this ground.

 

25.       On the last ground that is pressed on behalf of the Appellants we are, however, inclined to grant some relief.      The learned District Forum has awarded interest, albeit as a form of compensation, @ 18% per annum, whereas 12% is the rate that has been normally indicated by the Hon'ble             National Commission and Hon'ble Supreme Court in recent cases. We too feel that the reduction in the rate of        interest from 18% to 12% would be fair and just in the facts and circumstances of the case.

 

26.       In view of the above discussion, we uphold the order dated 23.1.02 passed by the learned District Forum in consumer case No.6/2001 with the modification that interest awarded on the claim amount of Rs. 29275/- shall be payable from 23.1.01 till the date of payment @ 12% per annum and not @ 18% per annum. It is directed accordingly.

 

27.       Before parting with the case we feel compelled to make             one observation. It is seen from the letter of repudiation dated 23.1.2001 issued by the Insurance Co. to the Consumer that the foremost ground for repudiating the claim was her "failure to produce a valid Trading Licence." In our opinion, which is also the opinion of the learned Forum, the rights of an insured under the Insurance Policy do not    hinge on the production or non-production of a valid Trading Licence. Repudiation on such a ground creates an impression that the Insurance Co. wishes to wriggle out of      its obligations under the Policy anyhow and under any pretext. We hope and trust that, in future, the Insurance Co. would restrict itself to grounds that fall strictly within the terms of an Insurance Policy.

 

28.       The registry shall send back the case records to the       learned District Forum along with a copy of this order and             shall also furnish copies hereof to the parties concerned.