IN THE CONSUMER DISPUTES REDRESSAL COMMOSSION, ALAPPUZHA

                        Wednesday the 16^th day of February, 2022

                               Filed on 07.12.2020

Present

1. Sri.S.SanthoshKumar.BSc. LLB (President)

2. Smt.P.R Sholy, B.A.L, LLB (Member)    

                                                    In       

                                         CC/No.317/2020

                                                       Between

Complainant:-                                                        Opposite parties:-

Sri.George Muthoot George                         1.       Chairman, The New India Assurance -

Managing Director                                                Co.Ltd., 87, M.G Road, Fort,

Muthoot Leisure and Hospitality                           Mumbai-400001

Services Pvt. Ltd.,

Xandari Riverscapes,                                   2.       The General Manager

Near Pallathuruthy bridge, A C Road,                    Customer Care Department

Alappuzha                                                            The New India Assurance Co.Ltd.

Rep.by Sri.Praveen K, Operations                         87, M.G Road, Fort, Mumbai-400001

In Charge, Xandari Riverscapes

(Adv.Sri.Paul T Chacko)                             3.       The Branch Manager

                                                                             The New India Assurance Co.Ltd.

                                                                             J&J Complex, 2^nd floor,

                                                                             VCSB road, Mullackal P.O.

                                                                             Alappuzha-688011

                                                                             (Adv.Sri.Jacob Mathew P for OPs)

O R D E R

SRI. S.SANTHOSH KUMAR (PRESIDENT)

Complaint filed under Sec.35of the Consumer Protection Act, 2019.

Complainant’s case briefly stated is as follows: -

Complainant is a company registered under the companies Act and it is represented by its managing director.  Complainant is the owner of house boat having name Meenachil having Reg. No.KIV/ALP/HB 0160/10 issued from Directorate of ports, Government of Kerala.  The said house boat was insured for hull machinery insurance policy for a sum of Rs.22,00,000/- with the opposite parties M/s New India Assurance Co. Ltd. for a period of one year from 14.05.17 to 13.05.18.

While the said house boat was berthed near Naluchira, Purackadu Village, Thottappally under Ambalappuzha police station a fire broke out from the aft of the house boat at about 1.50 AM on 25-3-18.  Though the crew tried to put out the fire they could not succeed and finally with the help of fire force team at 4.30 AM the fire was put out.  On 25-3-18 FIR was registered by the Ambalappuzha police station.  Neither the two passengers on board nor any of the crew members were injured in the accident.  But the hull of the house boat was completely burned and destroyed due to the fire and the port sank to the bottom of the river.  Preliminary accident survey was conducted on the same day by the surveyor deputed by the court office Alappuzha and filed report on 26.03.18.  M/s J.B Boda insurance surveyor and loss assessors Pvt. Ltd. who was deputed by the opposite party visited the site of the accident on 27.03.18 and filed a detailed report.  A claim was lodged for Rs.22 lakhs but vide letter dated 27.11.18 the claim was repudiated on the grounds that (1), certificate of registration was not valid as on date of accident as a certificate of survey lapsed on 09.02.2017 and (II), docking survey was long overdue as on date of loss.  As per letter dated 19.04.19 the complainant requested to reconsider the decision but wide letter dated 07.06.19 opposite party expressed their inability.

As per letter dated 09.07.19 complainant requested the Regional Grievance Committee New India Assurance Company Ltd. to reconsider the decision to repudiate the claim but it was also rejected as per letter dated 05.08.19.  Complainant had taken timely steps to get early certificate of survey for the years 2017 and 2018 from the port directorate, Government of Kerala.  Minor rectifications pointed out in the survey report dated 10.02.17 were carried out.  The port directorate had confirmed wide e-mail dated 13.01.18 that the request for survey has been received.  Complainant had also taken timely steps for the docking survey which was beyond 30.01.17.  However due to increase in the number of house boat the concerned authorities had not enough resources for to take timely action.  So there was absolutely no negligence lapse or laxity on the part of complainant.   Though the complainant sent legal notice to settle the claim it was not replied and hence the complaint is filed claiming an amount of Rs.22 lakhs along with interest being the insurance claim and Rs.3 lakhs as compensation for the loss of business and loss of income.

  Opposite parties filed a joint version mainly contenting as follows:-

The complaint is not maintainable.  Complainant is not a consumer stipulated under Sec.2 (1) (d) of the Consumer Protection Act.  Records reveals that complainant is the M.D of Muthoot Leisure and hospitality services Pvt. Ltd. having resorts and having more than 10 house boats.  The alleged house boat was used for commercial purpose and hence the complaint is not maintainable.  Opposite parties had issued hull and machinery policy to the house boat for a period of one year from 14.05.17 to 13.05.18 and the fire accident occurred on 25.03.18.  The liability if any is subjected to the  terms and conditions, limitation and exclusions of the policy.  The surveyors deputed by the opposite party had clearly stated that the house boat had no required papers to operate at the material time of accident.  Opposite parties had repudiated the claim as certificate of registration was not valid as on date of accident, as the survey was not done which was due on 09.02.17 and docking survey was also not done which was overdue on the date of loss.  The claim was repudiated after considering all aspects.  The request for survey was acknowledged by the port directorate only on 13.01.18. Opposite parties had pointed out that registration certificate of hull was not valid as on the date of the loss and it lapsed on 09.02.17. 

The averment that the complainant company suffered huge financial loss due to delay in settling the claim is not at all correct.  Dockyard survey was not conducted and it was long overdue.  The house boat had no permission to operate from the port authority.  There is clear violation of policy conditions and violation of Inland Vessel Rules and the house boat operated without required authorization and flouting all the rules.  There was no deficiency of service from the part of these opposite parties.  Complainant is not entitled for any amount and the repudiation was legal.  Hence the complaint may be dismissed with cost.      

On the above pleadings following points were raised for consideration:-

1. Whether the complainant is a consumer as defined under S.2 (7) of the Consumer Protection Act,2019?
2. Whether the house boat was used for commercial purpose at the time of accident as alleged in the version?
3. Whether there is any deficiency of service from the part of opposite parties as alleged?
4. Whether the complainant is entitled to realise an amount of Rs.22,00,000/- along with interest as prayed for?
5. Whether the complainant is entitled to realise an amount of Rs.3,00,000/- as compensation?
6. Reliefs and cost?

Evidence in this case consists of the oral evidence of PW1 and PW2 and Exts.A1 to A15 from the side of the complainant. Opposite parties have not adduced any oral evidence Ext.B1 to B8 were marked. 

     Point No.1 & 2

In the version opposite parties contented that the complaint is filed by the managing director of a private limited company having resorts and having more than 10 house boats.The house boat which was alleged to have been damaged was used for commercial purpose and hence the complaint is not maintainable.In support of his contentions the learned counsel relied upon the ruling of the Hon’ble Supreme Court in Kalpavruksha Charitable Trust Vs. Toshniwal brothers (Bombay) Pvt. Ltd. and another (1999 AIR (SC) 3356).Per contra the learned counsel appearing for the complainant contented that the house boat in question was insured with the opposite party to indemnify any accident.The relationship between complainant and opposite party is that of insured and insurer and there is no commercial transaction between them. Hence the contention taken by the opposite party is unsustainable and the complaint is perfectly maintainable before this Commission.In support of this contentions relied upon a ruling of National Consumer Disputes Redressal Commission in M/s Harsolia Motors Vs. M/s National Insurance Co. Ltd. in 1^st appeal No.160 of 2004 decided on 03.12.2004.Consumer is defined in Sec. 2 (7) of the Consumer Protection Act, 2019 which reads as follows:-

Consumer means any person who-

1. buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or  

Hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid andpartly promised, or under any system of deferred payment, when such services are availed of with the approval of the first-mentioned person, but does not include a person who avails of such service for any commercial purpose.

Explanation: For the purposes of this clause,-

1. the expression “commercial purpose” does not include use by a person of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;
2. the expressions “buys any goods” and “hires or avails any services” includes offline or online transactions through electronic means or by teleshopping or direct selling or multi-level marketing.

Person is defined in sec.2 (31) which reads as follows :-

Person includes-

1. an individual;
2. a firm whether registered or not;
3. a Hindu undivided family;
4. a co-operative society;
5. an association of persons whether registered under the Societies Registration Act, 1860 (21 of 1860) or not;
6. any corporation, company or a body of individuals whether incorporated or not;
7. any artificial juridical person, not falling within any of the preceding sub-clauses;

Service is defined in Sec.2 (42) which reads as follows:-

service means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, telecom, boarding or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.

          Admittedly this case is filed by a managing director of a private limited company which will come under the definition of person.  Since opposite party is an insurer it will come under the definition of service.  Now the important question to be looked into is whether complainant will come under the definition of consumer.  As stated earlier according to learned counsel appearing for the opposite parties complainant is doing business of house boat and so the insurance was taken for commercial purpose.  Since complaint has no case that it was for the purpose of earning his livelihood by means of self employment he is excluded from the definition of consumer it was contented.  The learned counsel appearing for the complainant relied upon the decision of

Hon’ble National Consumer Disputes Redressal Commission in M/s Harsolia Motors Vs. M/s National Insurance Co. Ltd.   It was held - At the outset, it is to be stated that an insured who takes the insurance policy cannot trade or carry on any commercial activity with regard to the insurance policy taken by him.  Under Sec.3 of the Insurance Act, 1938, no person is permitted to carry on business of insurance unless he obtains a certificate of registration from the Insurance Recovery and Development Authority.

Further, hiring of services of the Insurance Company by taking insurance policy by complainants who are carrying on commercial activities cannot be held to be a commercial purpose.  The policy is taken for reimbursement or for indemnity for the loss which may be suffered due to various perils.  There is no question of trading or carrying on commerce in insurance policies by the insured.  May be that insurance coverage is taken for commercial activity carried out by the insured.

The same view was reiterated by the Hon’ble National Consumer Disputes Redressal Commission in consumer case No.24 of 2014 between M/s Muthoot finance Ltd. Vs. Reliance General Insurance Company decided on 06.01.16.

Here in this case admittedly the complaint is filed by the managing director of a private limited company who is doing commercial activities.  However the house boat was insured with the opposite parties to indemnify them for the loss which may be suffered due to various perils.  The house boat in question was destroyed completely in a fire happened on 25.03.18.  The house boat was insured with the opposite parties for sum of Rs.22 lakhs and the policy was live at the time of accident.  The claim was repudiated by the opposite parties against which the complaint is filed.  On going through the decisions of the Hon’ble National Consumer Disputes Redressal Commission referred above it can be seen that it is squarely applicable in this case.  On the other hand the decision relied upon the learned counsel appearing for the opposite parties is not applicable in this case since the insurance company was not a party in that case and it was two business concerns.  In the said case the Hon’ble Supreme Court held that since the purchase of machinery was for commercial purpose the party will not come under the definition of consumer.  On the other hand here in this case the dispute is between complainant and opposite party which is an insurance company.  In such circumstances the contention of the learned counsel appearing for the opposite party that complainant will not come under the definition of consumer is unsustainable and so the complaint is perfectly maintainable.  These points are found in favour of the complainant.      

Point No.3 to 5

                    PW1 is the operations in charge of the complainant company.  He filed an affidavit in tune with the complaint and marked Ext. A1 to A15.  

          PW2 was working as port officer at Alappuzha.  Ext.A2 is the survey report which was prepared after the accident.  He is not sure whether the messages sent by the complainant reached his office since it was autogenerated.  Normally surveyor is deputed when the G.D is produced at the office.

          Managing director of M/s Muthoot Leisure & Hospitality services (P) Ltd. has filed this complaint against M/s New India Assurance Co. Ltd. claiming insurance claim of Rs.22 lakhs along with interest and Rs.3 lakhs as compensation.  The case advanced by the complainant is that they are the owner of a house boat by name Meenachil.  The hull and machinery of the house boat was insured with the opposite parties for a sum of Rs.22 lakhs and it was valid for a period of one year from 14.05.17 to 13.05.18.  On 25.03.18 when the house boat was berthed near Naluchira within the jurisdiction of Ambalappuzha police station a fire broke out.  In spite of earnest efforts by the crew and the Kerala fire force they could not put out the fire and the entire house boat was gutted and sank to the bottom of the river.  A case was registered by the Ambalappuzha police station.  The matter was informed to the opposite party and they sent a surveyor to assess the damage.  They calculated the loss as Rs.22,89,500/- at the category of total loss.  A claim petition was filed before the opposite parties.  However as per letter dated 27.11.18 the claim was repudiated on a contention that the certificate of registration was not valid as on the date of accident and the certificate of registration is subject to validity and compliance of condition from the survey certificate.  Since it was a breach of the special warranty opposite parties cannot entertain the claim.  Aggrieved by the same certain correspondences were made with the grievance cell of the opposite parties.  However since the complainant could not succeed the complaint was filed with the relief mentioned above.  The operations in charge of the company was examined as PW1 on the basis of an authority letter issued by the managing director.  Ext.A1 to A15 were marked.  The port officer was examined as PW2.  Opposite parties filed a version mainly contenting that though the house boat had registration on the date of accident the survey was not done.  The policy was issued subject to the survey and since survey was not done there is violation of condition.  Hence the claim was repudiated.  Opposite parties have not adduced any oral evidence.  Ext.B1 to B8 were marked from their side.

This view was reiterated by the Hon’ble Supreme Court in Amalendu Sahu Vs. Oriental Insurance Co. Ltd. on 25.03.2010.  In the said case there was violation of policy conditions.  Though the vehicle was registered for personal use and insured for the same the vehicle was given on hire and thus violated the terms of insurance policy.  The Hon’ble Supreme Court held that the insurance company liable to pay as non standard claims.  Hon’ble National Consumer Disputes Redressal Commission in Iffci Tokio Gic Ltd. Vs. Anil decided on 03.01.2022 followed the same principles.  In the said case the vehicle was used for transporting employees of Doordarsan where as it was registered as a private vehicle, thus violating the policy condition.  However it was held that the insurance company concerned being the public sector or in the private sector cannot repudiate the claim in total but has to settle it as non standard claim. Inconformity with the principle approved and laid down by the Hon’ble Supreme Court in the Amalendu Sahu case private insurance companies are not exempted.  So applying the principles laid down by the Hon’ble National Consumer Disputes Redressal Commission and the Hon’ble Supreme Court we are of the opinion that complainants are entitled for 75% of the insured amount, even if there is violation of policy conditions.  Here in this case the sum assured is Rs.22 lakhs, 75% of Rs.22 lakhs will come to Rs.16,50,000/- and the complainant is entitled for the said amount. 

The claim was repudiated as per Ext.A5 letter dated 27-11-18.  Ext.A6 to A10 will show that complainant was running from pillar to post to redress their grievance and finally Ext.A12 legal notice was issued on 19.08.2020.  Though opposite parties received the notice on 25.08.2020 which is revealed from Ext.A13 track consignment,  they have not even cared to send a reply notice.  It is also noticed that in Hon’ble National Consumer Disputes Redressal Commission in New India Assurance Co. Ltd. Vs. Narayan Prasad Appaprasad Pathak case which was decided on 01.02.2006, M/s New India Assurance Co. Ltd, which is the opposite party in this case was a party.  So the act of opposite parties amounts to deficiency in service and so the complainant is entitled for compensation and we are limiting the same to Rs.1,00,000/-.  These points are found accordingly.

Point No.6

          In the result complaint is allowed in part.

1. Complainant is allowed to realise an amount of Rs.16,50,000/- along with interest @ 9% from 27.11.18 (Ext.A5 repudiation letter) till realization from the opposite parties.
2. Complainant is allowed to realise an amount of Rs.1,00,000/- as compensation.
3.  Complainant is allowed to realise an amount of Rs.5,000/- as cost.

        The order shall be complied within one month from the date of receipt of the copy of this order.

Dictated to the Confidential Assistant, transcribed by her corrected by me and pronounced in open Commission on this the 16^th day of February, 2022.

Sd/-Sri.S.Santhosh Kumar (President)

Sd/-Smt.P.R Sholy (Member)

Appendix:-

Evidence of the complainant:-

PW1                           -           Sri. Praveen K (Witness)

PW2                           -           Capt.Abraham V Kuriakose

Ext.A1                       -           Copy of insurance policy.                              

Ext.A2                       -           Fire accident report

Ext.A3                       -           Copy of fire force report

Ext.A4                       -           Copy of FIR

Ext.A5                       -           Letter dtd.27.11.2018

Ext.A6                       -           Letter dated 19.04.2019

Ext.A7                       -           Letter dated 07.06.2019

Ext.A8                       -           Letter dated 09.07.2019

Ext.A9                       -           Letter dated 05.08.2019

Ext.A10                     -           Letter dated 22.10.2019

Ext.A11                     -           Copy of E-message dated 13.01.2018

Ext.A12                     -           Postal receipt dtd.25.

Ext.A13                     -           Legal notice dtd. 19.08.2020

Ext.A14                     -           Copy of registration certificate

Ext.A15                     -           Authority letter

Evidence of the opposite parties:- 

  Ext.B1                       -          Copy of policy schedule for hull machinery insurance

  Ext.B2                       -          Survey report dtd.25.07.2018

  Ext.B3                       -          Copy of institute time clauses-hulls 01.10.83

  Ext.B4                       -          Copy of accident report dtd.26.03.2018

  Ext.B5                       -          Copy of certificate of registration

  Ext.B6                       -          Copy of e-mail dtd.18.07.2018

  Ext.B7                       -          Copy of letter from surveyor

  Ext.B8                       -          Copy of certificate of survey from port department

// True Copy //

To

            Complainant/Oppo.party/S.F.

                                                                                                               By Order

                                                                                                         Assistant Registrar

Typed by:- Sa/-

Compared by:-