DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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M/s Allena Auto Industries (P) Limited, D-164, Phase-VII, Industrial Area, Mohali, District S.A.S. Nagar, Mohali (Punjab), through its Authorized Signatory.

              ---Complainant

Vs

The New India Assurance Company Limited, Branch Office: (350101), SCO No. 347-348, Sector 35-B, Chandigarh – 160036, through its Regional Manager/ Branch Head.

---- Opposite Party

BEFORE:    SH. LAKSHMAN SHARMA             PRESIDENT

MRS.MADHU MUTNEJA               MEMBER

           SH.JASWINDER SINGH SIDHU        MEMBER

Argued By:    Sh. Deepak Aggarwal, Counsel for Complainant.

Sh. Rajesh Sharma, Counsel for Opposite Party.

PER MADHU MUTNEJA, MEMBER

1.        Factually speaking, the Complainant had taken a consolidated insurance policy for various machines at its premises from the Opposite Party on 5.6.2009. A net premium of Rs.29,880/- had been paid. Details of machines insured were given on the cover note. Total sum insured under the Policy was Rs.51.60 lacs (Policy Annexure C-1). As per the terms and conditions of the Policy, the Opposite Party had undertaken to make payment for accidental, electrical and mechanical break down in the machines. As per the Complainant, one of the insured machines broke down on 27.01.2010 and needed to be repaired. The machine was got repaired at a cost of Rs.1,14,508/-. A claim was also lodged with the Opposite Party. While the claim was being processed, a second policy which was only a renewal of the earlier policy was issued effective from 5.6.2010 to 4.6.2011. A premium of Rs.40,593/- was paid. It has been averred that the Surveyor & Loss Assessor appointed by the Opposite Party inspected the machine and demanded certain documents from the Complainant, which were provided. However, the claim was not paid as the Surveyor & Loss Assessor stated that the machine inspected by them at Sr. No. 55-00608 does not find mention in the Policy No. 350101/44/09/58/30000010. Realizing the mistake committed the Complainant made a request to the Opposite Party vide letter dated 12.7.2010 (Annexure C-18). The relevant portion of the said letter reads as under: -

“With reference to above, it is brought to your kind notice that, in the said Policy serious lapses have been noticed. Our CNC machine make Lakshmi Machine Works bearing No. L-00149 has not been covered. Whereas another CNC Machine, make Lakshmi Machine Works bearing No. 30018454 has been covered. In fact this numbered machine does not exist. Even in the Policy of 4.6.2009 to 3.6.2010, the same mistake was committed by covering the Machine No. 30018454 which did not exist. Actually, the correct no. of this Machine is 55-00608 and not 30018454.”

          The Opposite Party was requested to verify the correct numbers of all the machines and incorporate the correct machine numbers in the Policy. After inspection, the relevant change was incorporate in the Policy by the Opposite Party with an endorsement effective from 14.7.2010 to 4.6.2011. 

          However, when the Complainant approached the Opposite Party for settlement of pending claim for the damaged machine, the claim was denied. It was stated by the Opposite Party that as the machine which had faced break down was not mentioned in the cover note giving details of the insured machines, no amount was payable.

          The Complainant has alleged that it was the negligence of the Opposite Party by which wrong machine numbers had been inserted in the policy on the first date of issue i.e. 5.6.2009, as well as in the renewal dated 5.6.2010. Alleging that the aforesaid act of the Opposite Party amounts to unfair trade practice and deficiency in service, the Complainant has filed the instant complaint that the claim pending since April, 2010 be settled and the Opposite Party be directed to pay the amount spent on the machine, besides compensation and cost of litigation.

2.        Notice of the complaint was sent to Opposite Party seeking their version of the case.

3.        The Opposite Party in reply after taking certain frivolous preliminary objections, has admitted the factual position of insuring 03 machines for a sum of Rs.17.20 lacs each vide Policy dated 5.6.2009. It has been stated that the description of items insured have been mentioned in the policy itself which has been placed on record by the Complainant at Annexure C-1. The Complainant has never raised any objection with respect to the insurance policy or its contents. On receipt of information of loss of machinery of the Complainant, the Opposite Party had deputed M/s Protech Engineers and Loss Assessors, Mohali, to conduct survey and collect all the relevant documents for the verification and assessment of the loss. To make his assessment, the Surveyor requested the Complainant to provide relevant documents, but the Complainant did not cooperate. Also, during inspection, it was found by the Surveyor that the damaged machine was not insured. The Sr. No. and Model & Make of the machine was different from the one mentioned in the insurance policy. As per the Opposite Party, the Sr. No. of the Machine damaged and inspected by the Surveyor was Make Lakshmi Machine Works, Model Smarturn and SI No. 55-00608; whereas the machine insured with the answering Opposite Party at Sr. No. 3 in Insurance Policy (Annexure C-1) is 30018454. Still the surveyor has assessed the damage to the machine at Rs.19,839/- only. However, the insurance claim has been denied to the Complainant as the damaged machine was not found insured. 

          On merits, Opposite Party has reiterated the submissions already made above. It has also been stated that as the machine which suffered loss was not insured by the Opposite Party in terms of the surveyor report no claim was payable. All other material contentions of the complaint were controverted. Pleading that there was no deficiency in service on their part, a prayer has been made for dismissal of the complaint.

          Opposite Party has also placed on record the affidavit of Mr. Pukhraj Singh of M/s Protech Engineers and Loss Assessors, Mohali, who was appointed as Surveyor. As per this affidavit, it has been stated that the damaged machine is not insured with the insurance company.

4.        Parties led evidence in support of their contentions.

5.        We have heard the learned counsel for the parties and have perused the record.

6.        The cover note issued to the Complainant at Annexure C-1 gives details of three machines. Item No. 3 which is the machine in question gives the Sr. No. of a machine other than the machine which has been damaged as per the averments of the Complainant as well as of the Opposite Party. The Machine No. given in the Policy is 30018454, while the damaged Machine bears No. 55-00608.  

7.        Undisputedly, the mistake has been made at the time of issuance of policy and has gone unnoticed, till the damage has occurred to the machine. The mistake has been made by the person who has issued the cover note as is blatantly evident from the details given. However, interestingly, even the Complainant has not taken note of the discrepancy even though the cover note was given to it in time. The discrepancy has been noticed only after objection has been raised by the Surveyor to the claim filed. 

8.        The Opposite Party has contended that they are unable to make payment of the claim in respect of the machine in question which is not insured. The damaged machine when inspected was not found to be a part of the policy. It is also on record that when the discrepancy was noted the Complainant requested the Opposite Party to make the change in the policy as is evident from letter dated 12.7.2010 (Annexure C-19). The Opposite Party has complied with the request and the change has been made in the policy effective from 14.7.2010 (Annexure C-20). It is evident from these two documents that the request for correction in the policy related to the current policy effective from 5.6.2010 to 4.6.2011 and the correction has been made effective after the date of request for change. There was no request by the Complainant for correction in the earlier policy. Hence, there has been no correction by the Opposite Party in the earlier policy, which is the subject matter of the instant complaint. As such, for all purposes the earlier policy effective from 5.6.2009 to 4.6.2010 does not cover the machine of the Complainant which has been damaged for which the instant complaint has been filed. The machine mentioned at Sr. No. 3 in the cover note is not owned by the Complainant and thus, there is obviously no insurance and when there is no insurance, then the Opposite Party is not entitled to retain the amount of premium received against the machine which does not exist.  The claim if payable would be only Rs.19,839/- in terms of the Surveyor’s Report (Annexure R-3), which has not been challenged by any of the parties.

9.        The Hon’ble Supreme Court of India in case Sikka Papers Limited Vs. National Insurance Company Limited, (2009) 7 Supreme Court Cases 777 has held that the Surveyor’s report is final, unless challenged by either the Complainant or the Opposite Party with specific contentions and averments. In the instant case even the amount of Rs.19,839/- is not payable, as the machine has not been found to be insured.

10.       In the peculiar facts and circumstances of the case and in the interest of the consumer/Complainant, we can only pass directions to the Opposite Party to refund the amount of premium received against the machine at Sr. No. 3 which does not exist. The machine belonging to the Complainant against which the claim has arisen has not been insured. The premium taken for the Machine at Sr. No. 3 be refunded by the Opposite Party along with interest @9% per annum from the date of receipt, till the date of payment. The Opposite Party shall also pay a consolidated amount of Rs.10,000/- to the Complainant for deficiency in service and cost of litigation. 

11.       The above said order shall be complied within 45 days from the date of its receipt, failing which Opposite Party will be liable for an interest @12% per annum on the premium amount; from the date of receipt i.e. 5.9.2009, till it is paid. However, the amount of Rs.10,000/- shall not carry any interest.

12.       Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

26^th November, 2012.                                            

Sd/-

(LAKSHMAN SHARMA)

PRESIDENT

Sd/-

(MADHU MUTNEJA)

MEMBER

Sd/-

 (JASWINDER SINGH SIDHU)

MEMBER