Tamil Nadu

South Chennai

CC/470/2014

M/s.Crimson Metal Engineering Co Ltd, - Complainant(s)

Versus

The National Insurance Company Ltd - Opp.Party(s)

K.Ramaswamy

09 Jan 2020

ORDER

                                                                             Date of filing      : 17.12.2014

                                                                               Date of Disposal : 09.01.2020

                                                                                  

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, CHENNAI (SOUTH)

@ 2^ND Floor, T.N.P.S.C. Road, V.O.C. Nagar, Park Town, Chennai – 3.

 

PRESENT: THIRU. M. MONY, B.Sc., L.L.B, M.L.                    : PRESIDENT

TR. R. BASKARKUMARAVEL, B.Sc., L.L.M., BPT., PGDCLP.  : MEMBER

 

C.C. No.470/2014

DATED THIS THURSDAY THE 09^TH DAY OF JANUARY 2020

                                 

M/s. Crimson Metal Engineering Co. Ltd.,

Formally known as Sri. Saarbati Steel Tubes Ltd.,

Represented by its Manager,

No.163/1, Broadway 2^nd Floor,

Chennai – 600 108.                                                         .. Complainant.                  

..Versus..

 

The National Insurance Company Ltd.,

Division No.IV,

Rep. by its Divisional Manager,

2^nd Floor, No.169, Anna Salai,

Chennai – 600 002.                                                    ..  Opposite party.

 

Counsel for the complainant      : M/s. K. Ramasamy & another

Counsel for the opposite party  : Mr. R. Ravichandran

 

ORDER

THIRU. M. MONY, PRESIDENT

       This complaint has been filed by the complainant against the opposite party under section 12 of the Consumer Protection Act, 1986 prays to pay a sum of Rs.3,51,780/- being the balance amount of claim with interest at the rate of 18% p.a. from the date of complaint to till the date of realization and to pay a sum of Rs.25,000/- towards compensation for mental agony with cost to the complainant.

1.    The averments of the complaint in brief are as follows:-

The complainant submits that he has obtained machinery insurance policy from the opposite party covering risk of loss / damage against unforeseen and sudden physical damage to the property of the factory situated at Sedarpet Industrial Estate, Mailam Road, Pondichery.  The total sum insured under policy Rs.1,69,74,041/-.  The damaged machinery alone was insured for Rs.19,87,500/- and the complainant paid premium to the opposite party a sum of Rs.4,27,100/- inclusive of Service Tax. The policy No.500400/44/00/5200000035 is valid from 13.06.2008 to 12.06.2009.   On 21.02.2009, one of the welding machine and its oscillator valve had suddenly breakdown due to abruptly surge in incoming voltage and the same was replaced with a new one as per the invoice No.086 dated:21.02.2009, the complainant sustained a loss of Rs.5,70,000/-.  The opposite party sent his Surveyor who visited and inspected the damaged machine and confirmed the damage.  The complainant submits that he received a letter from the opposite party on 02.07.2010 along with a loss voucher of surveyor without details of assessment for Rs.2,12,991/- as full and final settlement as against the claim of Rs.5,71,200/-.  But the complainant did not agree to receive the same and demanded a copy of Survey Report with the opposite party but the opposite party failed to produce the same.   The complainant submits that he received a letter dated:28.07.2010 with details of loss and deduction which reads as follows:-

ASSESSMENT OF LOSS:

Description	Amount in Rs.
Gross Assessed Loss	5,71,220/-
Less: Depreciation at 50%	2,85,000/-
Less: Policy excess	66,750/-
Less: Salvage	5,000/-
Less: RIV – Premium	829/-
Net payable	2,12,991/-

 

2.     The complainant submits that the opposite party has sent a letter dated:10.01.2011 along with a cheque for Rs.2,12,991/- to the complainant.   On the receipt of the cheque from the opposite party, the complainant wrote a letter dated:11.01.2011 stated that the cheque No.116219 dated:10.01.2011 have been received UNDER PROTEST.  Thereafter, the complainant demanded the balance amount of claim of Rs.3,51,780/- by sending remainder letters dated:02.05.2011, 03.09.2011 & 17.05.2012.  But the opposite party failed and neglected to settle the balance amount of claim. The complainant issued legal notice dated:19.09.2012 but no reply from the opposite party.  The act of the opposite party amounts to deficiency in service and unfair trade practice which caused great mental agony.  Hence, the complaint is filed.

3.      The brief averments in the written version filed by opposite party is as follows:-

The opposite party specifically denies each and every allegation made in the complaint and put the complainant strict proof of the same.   The opposite party states that the normal life of the oscillator valve tube is 10 to 15 years.   In this case, the oscillator valve tube was about 9 years old, so the Surveyor applied 50% depreciation is justifiable according to the provision of Section 2 (b) of the policy on reasonable basis, the opposite party settled the subject claim.   The complainant also was very much aware of this position.   The opposite party states that the complainant has made an offer to settle the subject claim at Rs.2,12,991/- on 02.07.2010.   The complainant did not agree for the same and they wanted the working details of the claim through their letter dated:23.07.2010.  Thereafter being satisfied with the manner of working; out of the claim by the opposite party, the complainant agreed to receive the amount of Rs.2,12,991/- through their letter dated:04.01.2011.   The contents of the said letter itself would show that the complainant has agreed to receive the said amount in full and final settlement and they had no reservation in that regard.   Accordingly, the subject-claim was settled and the complainant received the amount.   The opposite party states that they had not received any of the complainant’s letters.   The complaint is barred by limitation.   Hence, the complaint is liable to be dismissed.

4.     To prove the averments in the complaint, the complainant has filed proof affidavit as his evidence and documents Ex.A1 to Ex.A11 are marked.  Proof affidavit of the opposite party is filed and documents Ex.B1 to Ex.B4 are marked on the side of the opposite party.

5.      The points for consideration is:-

1. Whether the complainant is entitled to get the balance amount of Rs.3,51,780/- towards insurance claim with interest at the rate of 18% from the date of complaint till the date of realization of the amount as prayed for?
2. Whether the complainant is entitled to a sum of Rs.25,000/- as compensation towards mental agony with cost as prayed for?

6.      On point:-

Both parties filed their respective written arguments.  Heard the complainant’s Counsel also.   Perused the records namely; the complaint, written version, proof affidavit and documents.  The complainant pleaded and contended that he has obtained machinery insurance policy from the opposite party covering risk of loss / damage against unforeseen and sudden physical damage to the property of the factory situated at Sedarpet Industrial Estate, Mailam Road, Pondichery.   The total sum insured under the policy is of Rs.1,69,74,041/-.  The damaged machinery alone was insured for Rs.19,87,500/- and the complainant paid premium to the opposite party a sum of Rs.4,27,100/- inclusive of Service Tax. The policy No.500400/44/00/5200000035 is valid from 13.06.2008 to 12.06.2009 as per Ex.A1.   On 21.02.2009, one of the welding machine and its oscillator valve had suddenly breakdown due to abruptly surge in incoming voltage and the same was replaced with a new one as per the invoice No.086 dated:21.02.2009 thereby, the complainant sustained loss of Rs.5,70,000/- as per Ex.A2.  The opposite party sent his Surveyor who visited and inspected the damaged machine and confirmed the damage and admitted the loss but failed to submit the Survey Report as per IRDA Norms and it was kept pending about 9 months.  Further the complainant pleaded and contended that he received a letter from the opposite party on 02.07.2010 along with loss voucher of surveyor without the details of assessment for Rs.2,12,991/- as full and final settlement as per Ex.A3 against the claim of Rs.5,71,200/-.  But the complainant did not agree to receive the same and demanded a copy of Survey Report with the opposite party; but the opposite party failed to produce the same.   

7.     Further the complainant pleaded and contended that he received a letter dated:28.07.2010 as per Ex.A4 with details of loss and deduction which reads as follows:-

ASSESSMENT OF LOSS:

Description	Amount in Rs.
Gross Assessed Loss	5,71,220/-
Less: Depreciation at 50%	2,85,000/-
Less: Policy excess	66,750/-
Less: Salvage	5,000/-
Less: RIV – Premium	829/-
Net payable	2,12,991/-

 

On receipt of the assessment letter the complainant wrote a letter dated:16.08.2010 as per Ex.A5 stating that the offered amount of Rs.2,12,991/- is very low and it is unjustified and requested the opposite party to reconsider the claim.   But there is no response from the opposite party amounts to deficiency in service.   The opposite party has sent a letter along with a cheque No.116219 for Rs.2,12,991/- to the complainant dated:10.01.2011 as per Ex.A6.   On the receipt of the cheque from the opposite party, the complainant wrote a letter dated:11.01.2011 as per Ex.A7 stating that he has received the cheque No.116219 dated:10.01.2011 UNDER PROTEST which has not been objected by the opposite party.  Thereafter, the complainant demanded the balance amount of Rs.3,51,780/- by sending a letter and remainder letters as per Ex.A8, Ex.A9 & Ex.A10.   But the opposite party failed and neglected to settle the balance amount and turned deaf ears. Thereafter, the complainant issued legal notice dated:19.09.2012 as per Ex.A11 but no reply from the opposite party.  Hence, the complainant is constrained to file this complaint before this Hon’ble Forum for deficiency in service committed by the opposite party.   On a careful perusal of policy and its conditions in Ex.A1 under section 2 (b), if an insured item is destroyed / damaged by the company is liable to pay the replacement value of the item after deducting proper depreciation.  

8.     As per the Provisions of the Machinery Insurance Policy issued by the National Insurance Company Limited the Basis of Indemnity which reads as follows:

PROVISIONS

2. BASIS OF INDEMNITY:

 

(b) In cases where an insured item is destroyed the Company will pay the actual value of the item immediately before the occurrence of the loss including costs for ordinary freight, erection and customs duties if any provided such expenses have been included in the sum insured such actual value to be calculated by deducting proper depreciation from the replacement value of the item.  The Company will also pay any normal charges for the dismantling of the machinery destroyed but the salvage will be taken into account.

But the insurance company deducted huge amount towards depreciation which is contrary to the policy condition.  

9.     Further the contention of the complainant is that the life of oscillator valve tube has mentioned 10 to 15 years in the Surveyor Report but no document filed to support the opinion of Surveyor.  Hence, finding of the Surveyor is against clause 2 (b) of the insurance policy.  Therefore, the survey report of the Surveyor was baseless and was not re-considered by the opposite party which amounts to gross negligence and that constitutes deficiency in service and unfair trade practice. 

10.    The learned Counsel for the opposite party contended that the normal life of the oscillator valve tube is 10 to 15 years.   In this case, the oscillator valve tube was about 9 years old, so the Surveyor applied 50% depreciation is justifiable according to Section 2 (b) of the policy.   Hence, the settled claim is reasonable. But the opposite party has not produced any documentary evidence to prove the life of the oscillator value tube is of 10 to 15 years equally the alleged depreciation.  Further nowhere in the machinery insurance policy, there is nothing about depreciation.   Therefore, the finding of the Surveyor is against clause 2(b) of the insurance policy as per Ex.B1, Survey Report is baseless.   Further the contention of the opposite party is that the complainant has agreed for the settled amount of Rs.2,12,991/- and received the same sent by the opposite party by way of cheque along with a covering letter dated:04.01.2011 as per Ex.B4, it was the full and final settlement but the complainant received cheque UNDER PROTEST only which has not been objected.   Therefore, the complainant was not accepted for the full and final settlement and he is entitled to get balance claim amount as per Ex.A7 dated:11.01.2011.  

11.    Further, the contention of the opposite party is that the complainant had created a picture as if there was a continuous cause of action and had obtained an order from the Hon’ble State Commission that the complaint has been filed well within the period of limitation; is not acceptable because, the complainant pleaded and contended that Document No.7 to 10 were considered by the Hon’ble State Commission and allowed appeal against the rejection of the complaint.   Therefore, the question of limitation does  not arise in the present case as per the order of the State Commission.    Considering the facts and circumstances of the case, this Forum is of the considered view that the opposite party shall pay the balance claim amount of Rs.3,51,780/- with interest at the rate of 9% from the date of complaint to till the date of realization and shall pay a compensation of Rs.25,000/- for mental agony with cost of Rs.5,000/- to the complainant.

In the result, this complaint is allowed in part.   The opposite party is liable to pay a sum of Rs.3,51,780/- (Rupees Three lakhs fifty one thousand seven hundred and eighty only) along with interest at the rate of 9% p.a. from the date of filing of this complaint (i.e.) 17.12.2014 to till the date of this order (i.e.) 09.01.2020 to the complainant and to pay a sum of Rs.25,000/- (Rupees Twenty  five thousand only) towards compensation for mental agony with cost of Rs.5,000/- (Rupees Five thousand only) to the complainant.

The above amounts shall be payable within six weeks from the date of receipt of the copy of this order, failing which, the said amounts shall carry interest at the rate of 9% p.a. to till the date of payment.

Dictated  by the President to the Steno-typist, taken down, transcribed and computerized by her, corrected by the President and pronounced by us in the open Forum on this the 09^th day of January 2020. 

 

MEMBER                                                                                PRESIDENT

 

COMPLAINANT SIDE DOCUMENTS:-

Ex.A1	19.06.2008	Copy of Machinery Insurance Policy No.500400/44/00/5200000035 for the period from 13.06.2008 to 12.06.2009
Ex.A2	21.02.2009	Copy of invoice No.086 for Rs.5,71,200/-
Ex.A3	02.07.2010	Copy of letter from the opposite party to complainant
Ex.A4	28.07.2010	Copy of assessment of loss received from the opposite party to complainant
Ex.A5	16.08.2010	Copy of letter from the complainant to opposite party not willing to accept the offer
Ex.A6	10.01.2011	Copy of letter from the opposite party to complainant
Ex.A7	11.01.2011	Copy of protest letter from the complainant to opposite party
Ex.A8	02.05.2011	Copy of letter from the complainant to opposite party demanding balance amount of claim
Ex.A9	03.09.2011	Copy of the 1st remainder
Ex.A10	17.03.2012	Copy of the 2nd remainder
Ex.A11	19.09.2012	Copy of legal notice

 

OPPOSITE PARTY SIDE DOCUMENTS:-  

Ex.B1	28.05.2010	Copy of Survey Report of K. Razendhirane Insurance Surveyor / Loss Assessors
Ex.B2	23.07.2010	Copy of letter from the complainant to opposite party
Ex.B3	28.07.2010	Copy of reply letter from the opposite party to complainant to the above said S.No.2 letter
Ex.B4	04.01.2011	Copy of letter from the complainant accepting the offer of the opposite party towards full and final settlement

 

 

 

MEMBER                                                                                                                                              PRESIDENT