Andhra Pradesh

East Godwari-II at Rajahmundry

CC/38/2015

M/s. Sri Lakshmi Prasanna Agro Paper Industries Ltd., - Complainant(s)

Versus

The United India Insurance Co, Ltd., - Opp.Party(s)

K.V.V.S.Prabhakara Rao

22 Jul 2016

ORDER

                                                                                                Date of filing:   22.06.2015

                                                                                                Date of Order: 22.07.2016

 

BEFORE THE DISTRICT CONSUMER FORUM-II, EAST GODAVARI

DISTRICT AT RAJAHMUNDRY

 

                          PRESENT:   Smt H.V. Ramana, B.Com., L.L.M.,   PRESIDENT(FAC)

                      Sri A. Madhusudana Rao, M.Com., B.L., MEMBER          

    

       Friday, the 22^nd day of July, 2016

 

 

C.C.No.38 /2015

Between:-

 

M/s. Sri Lakshmi Prasanna Agro Paper Industries Ltd.,

(A company incorporated under Indian Companies Act),

3-173/4, Industrial Road, Polamuru-533 342, Anaparthi

Mandal, E.G. Dt., Represented by its Mg. Director,

M. Brahmannada Reddy, S/o. Dora Reddy, Hindu,

Aged 41 years, Main Road, Polamuru-533 342.                                     …        Complainant

 

                                    And

 

1)  United India Insurance Co. Ltd., Represented by its

      Branch Manager, Alamuru Road, Mandapeta, E.G. Dt.

 

2)  United India Insurance Co. Ltd., Represented by its

      Divisional Manager, Hotha Buildings, Inniespeta,

      Rajahmundry-1.                                                                              …        Opposite parties

 

 

 

            This case coming on 11.07.2016 for final hearing before this Forum in the presence of Sri K.V.S.S. Prabhakara Rao, Advocate for the complainant and Sri Ch.V. Prasad, Advocate for the opposite parties, and having stood over till this date for consideration, this Forum has pronounced the following:  

 

O R D E R

[Per Sri A. Madhusudana Rao, Member] 

This is a complaint filed by the complainant U/Sec.12 of Consumer Protection Act 1986 to direct the opposite parties to pay difference claim amount of Rs.2,06,801/- as assessed by surveyor; to pay interest at 18% p.a. on difference amount after expiry of 30 days from the date of survey report till payment and award costs of the complaint.

2.         The case of the complainant is as follows:- It is submitted that 2000 KVA HT Transformer was installed in its factory. During the course of business, the opposite parties approached and canvassed to insure the various machineries etc. located in the factory of complainant. The complainant got the said transformer insured along with the other machinery under insurance policy bearing No.151102/44/13/51/30000005 commencing from 15.4.2013 to 14.4.2014 with the opposite party company. The said policy was issued for Rs.20,76,888/-. At the time of issuing the above said policy, the opposite parties assured to indemnify any loss or damage to the machinery or equipment including the above transformer. While things stood thus, there was breakdown of the above transformer on 9.6.2013. Immediately, the complainant intimated the same to the opposite parties. The complainant shifted the transformer to M/s. ESENNAR, Hyderabad on 10.6.2013 as advised by the technicians of the manufacturing company and the same was informed to the company and shifting of transformer too. On receipt of information, the opposite parties deputed Surveyors & Loss Assessors by name Rank Surveyors (P) Ltd., Chennai to assess the loss/damage caused to transformer. On 20.6.2013, the said surveyor visited the work place at Hyderabad where the transformer was shifted and they have submitted their report dt.25.10.2013 certifying the net loss of Rs.5,06,801/- to the opposite party after deducting the salvage, average clause and policy excess amount out of actual loss of Rs.8,95,236/- recommending the opposite parties to pay the amount as indicated in the report. The complainant submitted the required documents along with bills and confirmed found in order. The complainant submits that despite several requests made for payment of the claim amount, the opposite parties did not choose to pay the amount as recommended by the surveyor, but dictating the terms on the complainant by suppressing the material facts. The complainant addressed a letter dt.10.12.2013 addressed to the 1^st opposite party requesting to settle the claim amount. Having received the said letter, they did not settle the amount in time. The opposite parties postponing the payment of claim amount. The complainant submits that they have paid the repair charges to repairers M/s. ESENNAR transformers by way of NEFT transfer from time to time from the bank account of the complainant. The complainant submits that it had also addressed a letter to the opposite parties requesting to release the claim amount. Having acknowledge the said letter, the opposite parties arranged claim amount less than the assessed amount amounting to Rs.3,00,000/- by way of cheque dt.17.12.2013 without assessing any reasons and basis which was acknowledged by the complainant without prejudice to its rights, the same was specifically informed to the opposite parties. The complainant questioned the opposite parties for payment of lesser amount than the assessed amount, but they are dictating the terms on the complainant to accept the amount without any condition. Finally, the complainant got issued a regd. notice dt.10.2.2015 demanding to pay the difference amount together with interest for delay in making claim. Having received the said notice, the opposite parties neither paid the amount nor replied. Hence, the complaint.    

3.         The 2^nd opposite party filed its written version and the same was adopted by the        1^st opposite party and denied all the allegations made by the complainant and the complaint is not maintainable either under law or on facts. This opposite party submits that the complainant has taken a Policy bearing No.151102441351300000005 from the Mandapeta Branch covering its property interalia the 2000 KVA Transfomer. As per the conditions of policy, the complainant has to inform the opposite party about the insured shall not shift any machinery damaged in any accident without the leave of the opposite party. The relevant clause No.6 in the conditions reads as follows:-

“6) Duties Following an Accident:- In the event of any occurrence which might give rise to a claim under this policy, the insured shall:

1. Immediately notify the company by telephone or telegram as well as in writing, giving an indication as to the nature and extent of loss or damage.
2. Take all reasonable steps within his power to minimize the extent of the loss or damage or liability.
3. Preserve the damaged or defective parts and making them available for inspection by an official or surveyor of the company.

The company shall not be liable for any loss or damage of which no notice and completed claim form have been received by the company within 14 days of its occurrence. Upon notification of a claim being given to the company the insured may proceed with the repair to any minor damage no exceeding Rs.2500/- provided that the carrying out of such repair is without prejudice to any question of liability of the company and that any question of liability of the company and that any damaged part requiring replacement is kept for inspection by the company, but in all other cases a representative of the company shall have the opportunity of inspecting the damage before any alteration, repairs or replacements are affected. Nothing contained herein shall prevent the insured from taking such steps as are absolutely necessary to maintain the operation of the plant. The liability of the company under this policy in respect of any item of property sustaining damage, for which indemnify is provided shall cease if the said item is kept in operation without being repaired to the satisfaction of the company. The complainant herein has informed this opposite party that transformer stopped working on 9.6.2013 by way of letter dt.11.6.2013. The said letter was received by the opposite party on 14.6.2013. It was stated in the said letter that an intimation was given to the manufacturer. The Energy systems, Hyderabad and on their advise the transformer was dismantled and sent to Hyderabad along with the estimate. On receipt of the letter intimating about the alleged loss, this opposite party has addressed a letter dt.17.6.2013 informing the complainant that as per the terms and conditions of policy, the complainant has to inform it about the alleged loss. The damaged transformer has to be shifted only with the prior inspection and approval of the opposite party only. The complainant herein gave a reply dt.27.6.2013 informing this opposite party that shifting the transformer to Hyderabad without prior information to this opposite party is a lapse on its part and regretted for the same and requested the opposite party to cooperate with it even though it violated terms and conditions of policy. The complainant has deliberately violated the terms and conditions of the policy and has shifted the transformer from the factory premises to Hyderabad without any prior intimation or inspection by this opposite party. On this ground alone the claim made by the complainant can be repudiated. However, in view of the cordial business relations, this opposite party has taken a lenient view and appointed a surveyor to assess the damages. This opposite party has appointed a surveyor called Rank Surveyors Private Limited to assess the damage occurred to the transformer on 19.6.2013 i.e. after receipt of the belated intimation about the breakdown of transformer given to it. The surveyor who assessed the damages also clearly mentioned in his report in Page No.5 that the transformer was already dismantled and repairs were in progress. It is submitted that shifting the transformer from factory premises to Hyderabad, dismantling it without prior intimation to his opposite party as itself a violation of terms and conditions of policy. The surveyor has assessed the damages at Rs.5,06,801/-. After receipt of the surveyor report it was brought to the notice of the complainant, that the claim has to be repudiated in view of the violation of terms and conditions of policy. The complainant has requested this opposite party to condone the violation of terms and conditions committed by it and settle the claim on non-standard basis. This opposite party took a lenient view and settled the claim on non-standard basis and paid the amount of Rs.3,00,000/- which was received by the complainant in full satisfaction. No such protest was made by the complainant till it addressed a letter dt.10.2.2015 i.e. after about 1 year 3 months of receiving the amount of Rs.3,00,000/-. The complaint is a belated one and barred by limitation. Hence, there is no deficiency of service on the part this opposite party and the complaint is liable to be dismissed with costs.     

4.         The proof affidavit filed by the complainant and Exs.A1 to A9 have been marked for the complainant. The proof affidavit filed by the opposite parties and Exs.B1 to B6 have been marked for the opposite parties.

5.         Heard both sides. The complainant filed written arguments.

6.         Points raised for consideration are:

 

1. Whether there is any deficiency in service on the part of the opposite parties?

            2. Whether the complainant is entitled for the reliefs asked for?

            3. To what relief?

 

7.  POINT Nos.1 & 2: On perusal of the record, it is observed that the complainant’s company installed 2000 KVA HT Transformer as it is a power intensive factory and obtained insurance policy bearing No.151102/44/13/51/30000005 commencing from 15.4.2013 to 14.4.2014 for Rs.20,76,888/- as per Ex.A1 = Ex.B1. The said insured transformer breakdown on 9.6.2013 and the same was informed to the opposite party immediately. The said damaged transformer shifted to M/s. ESENNAR, Hyderabad on 10.6.2013 on the advice of the technicians of the manufacturer of the said transformer. The opposite party deputed surveyor by name Rank Surveyors Private Limited, Chennai to assess the loss and the surveyors examined the damaged transformer on 20.6.2013 at Hyderabad and also visited our factory and conducted survey, filed their survey report dt.26.10.2013 with the opposite party. The said repaired transformer was shifted to the factory from Hyderabad on 1.10.2013 after repairs by M/s. ESENNAR as per Ex.A3 bills. As the opposite party not disbursed the claim amount on the policy, the complainant addressed a letter dt.10.12.2013 to the 1^st opposite party stating that the claim intimation dt.17.6.2013 was not settled and to release the claim amount at an early date vide Ex.A2. It is observed that the opposite party paid an amount of Rs.3,00,000/- by way of cheque on 17.12.2013 to the complainant by way of cheque.

            The 2^nd opposite party filed its version on behalf of the opposite parties and contended that as per the policy condition vide Ex.B1, the complainant has to inform the opposite party about accident and without the leave of the opposite party shift any damaged machinery as per clause-6 of the policy condition. Further, the opposite party insurance company shall not be liable for any loss or damage of which no notice and completed claim form have been received by the opposite party within 14 days. In the present case, the damage occurred on 9.6.2013 and was informed by the complainant through letter dt.11.6.2013 vide Ex.B2 received by the opposite party on 14.6.2013 stating that on the advice of manufacturer, the insured transformer was sent to Hyderabad. The insurance company further contended that they appointed surveyor on 19.6.2013, in this regard, the 1^st opposite party addressed a letter to the complainant stating that the fact, the insured shall not dismantle the transformer without their knowledge vide Ex.B3 dated 17.06.2013 and which cause problem in assessing loss by the surveyor. For that the complainant, addressed reply to the 1^st opposite party vide letter dt.24.6.2013 under Ex.B4 stating that they thought it was a minor repair, but after inspection by the engineers, they were informed it was a major complaint, so please cooperate and expressed their excuse in furnishing information to the insurance company. It is observed that the surveyor reported that by the time of his inspection on 20.6.2013, the transformer was dismantled and repairs are under progress and the surveyor assessed the loss at Rs.5,06,801/- as per Ex.B6 = Ex.A5 survey report. The opposite party insurance company further contended that the claim of the complainant has to be repudiated due to violation of terms and conditions of the policy, but took a lenient view and settled the claim on non-standard basis and paid an amount of Rs.3,00,000/-. The complainant after one year and three months time of receipt of the claim amount of Rs.3,00,000/- without protest and issued satisfaction voucher vide Ex.B5 dated 17.12.2013.  

We further observed that, after receipt of the above said claim amount of Rs.3,00,000/-, the complainant addressed a letter dt.11.11.2014 under Ex.A4, requested the 1^st opposite party to supply surveyor report with regard to their claim and accordingly, the 1^st opposite party furnished the copy of Survey report vide Ex.A5 to the complainant on 4.2.2015. On that, the complainant got issued Ex.A6 notice dated 10.2.2015 demanding the opposite parties to pay the balance amount of Rs.2,06,801/- with interest @ 18% p.a. as per the net assessed loss of Rs.5,06,801/- under survey report and Exs.A7 to A9 are the acknowledgements for the same.

Now, the point to be decided in this case is that whether the complainant is entitled for the balance claim amount of Rs.2,06,801/- as per the assessment made by the surveyor appointed by the opposite party insurance company to assess the loss occurred to the insured transformer of the complainant after the complainant issued full satisfaction voucher to the opposite party after receipt of Rs.3,00,000/- towards claim.

 

We observed that the complainant’s transformer was damaged on 9.6.2013 and informed to the opposite parties about the incident by the complainant, but before the arrival of opposite parties to the factory premises for inspection, the complainant shifted that the damaged transformer on 10.6.2013 to Hyderabad for repairs on the advice of the technicians of the manufacturer of the transformer and informed the same to the opposite parties through letter dated 11.6.2013, which was received by the opposite parties even according to them on 14.6.2013. It is observed that the surveyor inspected the damaged transformer on 20.6.2013 at Hyderabad workshop after receipt of information from the opposite parties to conduct survey on 19.6.2013 and again on 3.10.2013 at the insured factory premises, the surveyor in his report dated 25.10.2013 recommended a net assessment of Rs.5,06,801/- out of Rs.8,95,235/- under Ex.A3 bills incurred by the complainant for reinstallation of the said insured transformer after deducting policy excess at the rate of 1%, average clause being under insurance and others. We further observed that the opposite parties made the survey and information from the complainant was received within 14 days after occurrence of the damage on 9.6.2013 and even preliminary survey of the damaged dismantled transformer was conducted on 20.6.2013 itself. It is evident that the said survey report was not supplied to the complainant prior to settlement of policy claim for Rs.3,00,000/- on 17.12.2013 through cheque and even not informed that the claim was settled on non-standard basis, but obtained full satisfaction from the complainant.

Further, we observed that after obtaining the surveyor report from the opposite parties on 4.2.2015, the complainant came to know that the opposite parties disbursed insufficient claim amount of Rs.3,00,000/- out of Rs.5,06,801/- recommended by the surveyor as per his assessment against the expenses incurred by the complainant to a tune of Rs.8,95,235/-. So, it is evident that the opposite parties insurance company did not consider the net assessment made by the independent surveyor in settling the claim, but contended that they took a lenient view in settling the claim of the complainant without repudiating the claim though the complainant not followed the terms and conditions of the policy. This kind of acts on the part of the opposite parties amounts to deficiency in service and unfair trade practice. On that, the complainant got issued legal notice under Ex.A6 demanding for the balance claim amount of Rs.2,06,801/-.   

 

The complainant relied on the following judgments in (1) New India Assurance Co. Ltd., Vs. Kamal Nayan: IV(2006) CPJ 84 (NC), it was held that “the report of surveyor is an important piece of document and evidence which cannot be brushed aside without sufficient reasoning, (2) Jagadam Bhairava Murthy Vs. Oriental Insurance Co. Ltd.: IV(2007) CPJ 196 (NC), in which it was held that the report of the licensed Surveyor cannot be brushed aside lightly, and in this case, as cited about, the appellant has completely failed to rebut the finding of the Surveyor. Further, as per settled law “the mere execution of the discharge voucher would not always deprive the consumer from preferring a claim with respect to the deficiency in service or consequential benefits arising out of the amount paid in default of the service render despite execution of the discharge voucher, the consumer may be in a position to satisfy the Tribunal or the Commission that such discharge voucher or receipt had been obtained from the complainant under circumstances which can be termed as fraudulent or exercise of undue influence or by misrepresentation or the like. So, in the present case, the complainant was put in dark without furnishing the said survey report prior to the settlement of claim and failed to inform the complainant that the claim was settled on non-standard basis which amounts to deficiency in service and unfair trade practice on the part of the opposite parties.

With the discussion held supra and under the facts and circumstances of the case and after perusal of the settled law, we are in the considered opinion that the complainant is entitled for the balance claim amount of Rs.2,06,801/- as recommended by the Surveyor towards damages with some interest.  

                

8.   POINT No.3:  In the result, the complaint is allowed partly, directing the opposite parties insurance company to pay Rs.2,06,801/- towards balance claim amount with interest @ 9% p.a. from the date of complaint i.e. 22.06.2015 till realization to the complainant. We further direct the opposite parties to pay an amount of Rs.2,000/- towards costs of this complaint to the complainant. Time for compliance is two months from the date of this order.    

 

Typed to dictation, corrected and pronounced by us in open Forum, on this the 22^nd day of July, 2016.

    

                   Sd/-                                                                                          Sd/-

              MEMBER                                                                              PRESIDENT(FAC)

         

 

 

 

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

 

FOR COMPLAINANT: None.                                         FOR OPPOSITE PARTIES: None.

 

DOCUMENTS MARKED

 

FOR COMPLAINANT:

 

 

Ex.A1    Policy copy bearing No.151102/44/13/51/30000005.

Ex.A2    Letter dt.10.12.2013 addressed to the 1^st opposite party by the complainant.

Ex.A3    Invoice-cum-quotation dt.1.10.2013 addressed to the complainant by M/s.

              ESENNERS (P) Ltd.

Ex.A4    Letter dt.11.11.2014 addressed to the 1^st opposite party by the complainant with a

             request to provide Survey report under RTI Act.

Ex.A5    Survey report dt.25.10.2013 submitted by Rank Surveyors (P) Ltd., Chennai along

              with covering letter dt.4.2.2015 by the opposite parties concerned.

Ex.A6    Regd. notice dt.10.2.2015 issued by the complainant to the opposite parties and their

             Visakhapatnam Regional office.

Ex.A7    Postal acknowledgement of O.P.No.1.

Ex.A8    Postal acknowledgement of O.P.No.2.

Ex.A9    Postal acknowledgement of Regional office of opposite parties.

 

FOR OPPOSITE PARTIES:-       

 

Ex.B1    Policy bearing No.151102441351300000005 issued to the complainant by the

             opposite parties with conditions.

Ex.B2    Letter dt.11.6.2013 addressed by the complainant to the opposite party received on

             14.6.2013.

Ex.B3    Letter dt.17.6.2013 addressed by the opposite party to the complainant.

Ex.B4    Letter dt.27.6.2013 addressed by the complainant to the opposite party.

Ex.B5    Discharge voucher dt.17.12.2013 signed by the opposite party for Rs.3,00,000/-.

Ex.B6    Survey report given by Rank Surveyors Private Ltd.

 

                  Sd/-                                                                                           Sd/-

              MEMBER                                                                              PRESIDENT(FAC)