Chandigarh

DF-II

CC/432/2014

M/s Handa Brick Industries - Complainant(s)

Versus

The Oriental Insurance Company Limited - Opp.Party(s)

Tapas Sharma, Adv.

23 Nov 2015

ORDER

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

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Consumer Complaint  No	:	432 of 2014
Date  of  Institution	:	22/8/2014
Date   of   Decision	:	23.11.2015

 

 

 

 

M/s Handa Brick Industries Village- Joula Kallan, Tehsil-Dera Bassi, District SAS Nagar, Punjab, through its proprietor Sh. Vivek Handa.

 

             …..Complainant

Versus

 

1. The Oriental Insurance Company Ltd. Branch Office-Chopra Tower, IInd Floor, above Oriental Bank of Commerce Ambala Chandigarh Road, Dera Bassi, Punjab 140507 through its Branch Manager.
2.  The Oriental Insurance Company Ltd. service centre regional office, SCO No. 109-111, Surindra Building Sector 17D, Chandigarh through its Regional Manager.
3. The Oriental Insurance Company Ltd. registered and Head Office, A-25/27, Asaf Ali Road, New Delhi 110002 through its concerned official/Managing Director.   

 

….. Opposite Parties

 

BEFORE:  SH.RAJAN DEWAN                 PRESIDENT

         SH.JASWINDER SINGH SIDHU       MEMBER

         MRS.PRITI MALHOTRA             MEMBER

 

 

For complainant(s)      :     Sh. Tapas Sharma, Advocate

 

For Opposite Parties    :     Sh. Sukaam Gupta, Advocate  

 

 

PER PRITI MALHOTRA, MEMBER

 

 

          As per the case of the complainant is that it is a unit engaged in manufacture of bricks and it has availed insurance policy Annexure C-1 i.e. the Standard Fire and Special Perils Policy after paying the due premium to the Opposite Party No.1 for the period from 11.12.2013 to 10.12.2014 for Rs.15 lacs against any loss caused to the brickworks including re-fractories and fire bricks.  Unfortunately on the intervening night of 12^th/13^th May, 2014 due to heavy rain water accumulated in the premises and approximately 5 lacs moulded raw bricks of the complainant damaged. The Opposite Party No.2 was intimated regarding the same on 13^th May 2014. Accordingly a surveyor was appointed who conducted the survey on 14.5.2014. It has been alleged that Opposite Party No.2 vide its letter dated 2.6.2014 Exhibit 3 repudiated the claim of the complainant on the basis of survey report and on the plea that the cause of the loss i.e. rain is not covered under the standard Fire and Perils Policy.  However, in the said letter itself it was admitted that the said policy covers loss due to flood and inundation. The Opposite Parties did not supply the policy document to the complainant earlier but provided the same on 16.6.2014 after a request from the complainant.  The complainant vide letter dated 7.7.2014 requested the Opposite Party No.2 pay the claim but to no avail. Alleging the said act of OPs as deficiency in service, this compliant has been filed.

 

2. Opposite Parties in their join reply  while admitting the factual matrix of  the case stated that after receiving intimation regarding the loss, answering Opposite Parties immediately deputed the surveyor  and the surveyor submitted reported on 19.5.2014. It has been stated that loss caused to the bricks due to the rain and said bricks were lying outside in the Open field and hence got damaged and no flood was reported on that very day and standard Fire Perils insurance policy is a named perils policy and all the perils covered under  the SFP policy and hence claim was not admissible as same was outside the scope of terms and conditions of the insurance policy. The policy in question only covers flooded and inundation and the said rain on the date of loss has not resulted into floor or inundation. As such the same was rightly repudiated.  The complainant was duly supplied terms and conditions alongwith policy. As the second page of the policy clears whether same were supplied or not the complainant intentionally did not place the same on record.  Pleading no deficiency in service and denying rest of the allegations, it is prayed that the complaint be dismissed.
3. The Complainant also filed rejoinder thereby reiterating the averments as made in complaint and controverting that of the Opposite Parties made in the reply.
4. Parties led evidence in support of their contentions.
5. We have heard the ld. Counsel for the complainant, parties and have also perused the record.
6. It is well admitted by Opposite Parties that ‘Standard Fire and Special Perils’ Policy was issued to the complainant vide Annexure C-1 for the period from 11.12.2013 to 10.12.2014 for Rs.15 lacs against any loss caused to the brickworks including re-fractories and fire bricks. It is also not debatable that on the intervening night of 12^th/13^th May 2014 heavy rain occurred leading to inundation and accumulation of the water at the premises of the complainant, which damaged approximately 5 lakh moulded raw bricks rendering the loss of Rs.5.08 laks to the complainant. Due intimation of the loss was given to the Opposite Parties who deputed surveyor to assess the loss. The Opposite Parties on the other hand, on the basis of survey reported Exhibit C-2 dated 19.5.2014 repudiated the claim of the complainant vide letter dated 2.6.2014 Annexure C-3. The complainant in the complaint has challenged that repudiation.
7.     The Opposite Parties repudiated the claim of the complainant stating that the cause of loss is rain & loss due to rain is not covered under the policy in question, which covers only loss due to flood/ inundation . This ground of repudiation does not hold good in view of the judgment passed by the Hon’ble National Commission, New Delhi in Oriental Insurance Co. Ltd. Vs. M/s R.P. Bricks decided on 15^th May, 2013 wherein it has been held by the Hon’ble National Commission that floold/inundation also means outpouring of water and loss caused due to seepage following heavy rains into any part of the insured premises would be covered under the definition of flood and inundation and the claim in such circumstances should be indemnify. The concluding para of the judgment is reproduced as under:-

We are unable to accept the above interpretation/contention of the surveyor/appellant insurance company. In number of cases under almost identical circumstances where  claims had been repudiated under the Fire and Special Perils Policy on the ground that the damage caused to the insured stocks/premises had been caused because of seepage caused due to heavy rains and not due to inundation, floods etc. We had concluded that the claim was wrongly repudiated since flood/ inundation also means outpouring of water. On this analogy loss caused due to seepage following heavy rains into any  part of the insured premises would be covered under the definition of “flood” and “inundation” and the claim should in such circumstances be indemnified. Some specific judgments wherein we had reached the above conclusions include Bajaj Allianz General Insurance Co. Ltd. Vs. Gondamal Hardyal Mal(Iv (2009) CPJ 165 (NC); New India Assurance Co. LTd. Vs. Dani Mourdhwaj Cold Storage Pvt. Ltd. (RP No. 4113 decided on 10.2.2012); and Oriental Insurance Co. LTd. Vs. M/s Sathyarayana Setty & Sons (RP No.3454 of 2007) decided on 14^th March, 2012). In the instant case since it is not in dispute that the damage was caused by heavy rains entering the premises, we are of the view that since this was the outcome of inundation around the area, it would be logically covered under the policy even though “seepagae” or “heavy rains” may not per se have been listed as one of the perils in the insurance policy. Therefore, following our own judgments, we agree with the order of the State Commission, which had allowed the respondent/complainant’s appeal and uphold the same in toto.”

 

8. The above cited judgments guided us to hold that the claim of the complainant is duly covered under the policy.
9. Now it is to be determined that whether the loss occurred is genuine & what amount the complainant is entitled for the loss occurred. For this we hereby peruse the report of the surveyor submitted to the Opposite Parties. The surveyor vide its report dated May 19, 2014 ascertained that the contention of the insured for the loss of Rs.5.00 lacs raw bricks lying  (moulded but yet to be burned)  outside in the open fields got damaged  appears to be reasonable and there is every possibility of such an event and further added that  we  did not find anything suspicious or contrary to the statement of insured. At the end the Surveyor remarked that in our opinion the loss was sudden and unforeseen and could have occurred by the reason stated by the insured.  This view of the surveyor is sufficient to held that the loss occurred in the premises of the complainant is genuine. Now the prime issue left to be decided is the quantum of claim to be paid to the complainant in view of the loss occurred.  The Surveyor vide its report calculated the loss as detailed under:-

“ The damaged bricks were moulded and were lying in the open for drying. The insured informed that they have to pay Rs.700.00 per 1000 bricks for moulding. Since the material can be reused, we are allowing Rs.700.00 plus Rs.50.00 towards other misc expenses.

SL	Description	Claimed			Assessed
		Qty	Rate Rs.	Amount Rs.	Qty	Rate Rs.	Amount Rs.
1.	Labour for remoulding	500,000	0.90	4,50,000.00	500000	0.75	375000.00
2.	Debris removal charges			58000.00			3750.00
				508000.00			378,750.00

 

The insured claimed Rs.58,000.00 towards debris removal. The same is assessed @1% of claim amount as per terms and conditions of policy issued.”

 

10.     It is revealed that after assessing the loss to the tune of Rs.3,78,750/-  the surveyor applied ‘less average clause’ and ‘less excess clause’, which resulted in the  deduction of 79.02% i.e. Rs.2,96,325/- and 10,000/- respectively out the total assessed amount of Rs.3,78,750/-. In the “recommendations” the surveyor mentioned that gross loss assessed is Rs.3,78,750 and the net assessment is   Rs.72,425/-.
11.     The complainant in the present complaint has also agitated that the deductions made on the assessed amount by applying “average clause” is blatantly wrong. The Opposite Parties justified the  deduction stating that the same were made as per terms and conditions of the policy placed on record. The complainant also claimed that no terms and conditions were ever supplied to it at the time of issuance of the policy and it received the same only vide  Annexure C-4 dated 16.6.2014  and that too when the claim was already assessed by the surveyor in report dated May 19, 2014. The complainant further claimed hat as such those terms and conditions are not applicable to the case of the complainant. 

         It is the plea of the Opposite Parties that they duly supplied the terms and condition of the policy to the complainant at the time of issuance of the policy, so the same are applicable in the case of the complainant. Leaving aside this controversies we perused the terms and conditions and unable to find any clause which entitle the Opposite Parties to apply “average clause” on the loss assessed. However, the deduction of Rs.10,000/- made under the “excess clause” is duly covered under the “general exclusions” mentioned in the terms and conditions of the policy placed on record. So the Opposite Parties are justified in deducting Rs.10,000/- under excess clause, but the deduction so made by applying the average clause is arbitrary and unjustified.

 

12.     In this view of the matter, we are of the considered opinion that the complainant is entitle for the amount assessed by the surveyor excluding the amount of Rs.10,000/- deducted under excess clause. Hence   there is deficiency in rendering service on the part of the Opposite Parties.

        

13       We are of the concerted opinion that the complaint deserves to be allowed.  Accordingly, the complaint is allowed and the Opposite Parties are jointly & severally directed as under:-

        

a]  To pay Rs.3,68,750/- (3,78,750/-less Rs.10,000/-(deducted under excess clause)) to the complainant as assessed by the Surveyor.

 

b]  To pay Rs.15,000/- as compensation for causing mental agony and physical harassment to the complainant.

C]  To pay Rs.7,000/- towards litigation expenses.

 

         The above said order shall be complied with by the Opposite Parties within 45 days of its receipt, failing which they shall be liable to pay interest on amount awarded at (a) @12% p.a. from the date of claim till realization and on the amount at (b) from the date of this order till it is paid, besides paying litigation expenses. 

 

         The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

Announced

23.11.2015          

                                                                             Sd/-  

 (RAJAN DEWAN)

PRESIDENT

 

Sd/-

 (JASWINDER SINGH SIDHU)

MEMBER

 

Sd/-

(PRITI MALHOTRA)

MEMBER

mp

 

 

DISTRICT FORUM – II

CONSUMER COMPLAINT NO.432 OF 2014

PRESENT:   None   Dated the 23rd  day of November, 2015

O R D E R                        Vide our detailed order of even date, recorded separately, the complaint has been allowed against Opposite Parties.                    After compliance, file be consigned to record room.

 

(Priti Malhotra)	(Rajan Dewan)	(Jaswinder Singh Sidhu)
Member	President	Member