Punjab

Sangrur

CC/226/2015

M/s Sardar Rice Mills - Complainant(s)

Versus

UIIC Ltd. - Opp.Party(s)

Shri Yogesh Gupta

21 Dec 2015

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, SANGRUR.

 

                                                               

                                                Complaint No.    226

                                                Instituted on:      22.04.2015

                                                Decided on:       21.12.2015

 

M/s. Sardar Rice Mills, Mehlan Road, Sangrur through its partners Harjinder Singh and Satwinder Singh.

                                                        …Complainant

                                Versus

1.     United India Insurance Company through its Divisional Manager, Dhuri Road, Sangrur.

2.     Punjab and Sind Bank, Branch Sangrur through its Branch Manager, Inside Patiala Gate, Sangrur.

                                                        ..Opposite parties

 

 

For the complainant    :       Shri Yogesh Gupta, Adv.

For OP No.1              :       Shri Ashish Kumar, Adv.

For OP No.2              :       Shri L.K.Singla, Adv.

 

Quorum:    Sukhpal Singh Gill, President

                K.C.Sharma, Member

                Sarita Garg, Member

 

 

 

Order by : Sukhpal Singh Gill, President.

 

1.             M/s. Sardar Rice Mills, Sangrur through its partners Shri Harjinder Singh and Satwinder Singh, complainant (referred to as complainant in short) has preferred the present complaint against the opposite parties (referred to as OPs in short) on the ground that the complainant obtained the services of OP number 1 through OP number 2 by obtaining insurance policy number 994896 and 976544 on 2.5.2014 and got insured the plant, machinery and its accessories, electronic motors and building etc. The OPs issued only cover notes, but no policies were issued to the complainant.  Further case of the complainant is that a fire broke out in the factory of the complainant on 28.8.2014 at about 11.30 in which sortex machine, cabin etc. worth Rs.17.00 Lacs were damaged.  The intimation of the loss was given to OP number 1 on 28.8.2014. Accordingly, the officials of OP number 1 had got filled claim forms and got signatures from the complainants Harjinder Singh and Satwinder Singh.  It is further averred that the complainant got served a legal notice upon the OP, but the OP number 1 remitted only an amount of Rs.44,279/- in the bank account of the complainant directly, whereas the complainant had suffered a loss of about Rs.17.00 Lacs.  Thus, alleging deficiency in service on the part of the OPs, the complainant has prayed that the OPs be directed to pay to the complainant an amount of Rs.16,55,721/- along with interest @ 12% per annum w.e.f. 28.8.2014 till realisation and further claimed compensation for mental torture, agony and harassment and  litigation expenses.

 

2.             In reply filed by OP number 1, it is stated that on the request of the OP number 2, the OP number 1 issued a standard fire and special perils policy for the period from 5.5.2014 to 4.5.2014 subject to the terms and conditions of the policy and the sum insured was Rs.70.00 Lacs (Rs.35.00 Lacs regarding building and Rs.35.00 Lacs regarding plant and machinery).  It is further admitted that after receiving the intimation dated 28.8.2014 regarding fire at sortex machine due to electrical short circuit, the OP number 1 immediately appointed Er. Bhupesh Bhardwaj Surveyor for spot survey, who submitted his report dated 28.09.2014 and observed the cause of fire as short circuit in sortex machine panel.  Thereafter the OP also appointed M/s. Joshan and Associates, Surveyor and Loss Assessor for submission of the final report, who submitted its report dated 30.09.2014 and assessed the loss to the tune of Rs.10,13,393.96 including cabin after deducting depreciation, salvage value, excess clause and also applying average clause.  It is further stated that as per exclusion clause number 7 of the policy, the policy does not cover loss, destruction or damage to any electric machine, appartus, fixture or fitting arises from or occasioned by over running, excessive pressure, short circuiting, arcing, self fitting or leakage of electricity from whatever cause provided that this exclusion shall apply only to the particular electrical machine, appartus, fixture of fitting so affected and not to other machines, apparatus, fixture or fitting which may be destroyed or damaged by fire so set up.  It is further stated that as regards cabin, the above said surveyor assessed the loss to the extent of Rs.75,000/- only.  It is further stated that the value of the risk for plant and machinery was Rs.48,36,120/-, but the same was got insured for Rs.35.00 Lacs only, which was under insurance, therefore, the company assessed the loss at Rs.44,279/- and the company accordingly paid Rs.44,185/- to the account of the complainant in full and final settlement.  It has been denied that the OP number 1 is at all deficient in rendering service to the complainant.

 

3.             In reply filed by Op number 2, it is stated that the OP number 2 has only got insured plant and machinery and its accessories of which the complainant had obtained the loan.  It is stated further that nothing is to be done regarding the loss by OP number 2 as the same is between the complainant and OP number 2.  The other allegations levelled in the complaint have been denied in toto.

 

4.             The learned counsel for the complainant has produced Ex.C-1 affidavit of Ranjit Singh, Ex.C-2 affidavit of Satnam Singh, Ex.C-3 affidavit of Harjinder Singh, Ex.C-4 and Ex.C-5 photographs, Ex.C-6 copy of letter dated 24.12.2014, Ex.C-7 and Ex.C-8 postal receipts, Ex.C-9 copy of letter dated 18.12.2014, Ex.C-10 copy of letter dated 11.9.2014, Ex.C-11 copy of claim form, Ex.C-12 copy of quotation, Ex.C-13 copy of letter dated 28.8.2014, Ex.C-14 copy of fire report, Ex.C-15 and Ex.C-16 copies of insurance cover notes, Ex.C-17 copy of fire report, Ex.C-18 copy of DDR, Ex.C-19 copy of legal notice, Ex.C-20 copy of postal receipt, Ex.C-21 reply of legal notice, Ex.C-22 copy of certificate of PSPCL, Ex.C-23 copy of tariff of PSPCL and closed evidence. On the other hand, the learned counsel for OP number 1 has produced Ex.OP1/1 copy of policy, Ex.OP1/2 copy of letter dated 28.8.2014, Ex.OP1/3 copy of survey report, Ex.OP1/4 copy of letter dated 28.8.2014, Ex.OP1/5 to Ex.OP1/8 photographs, Ex.OP1/9 copy o survey report dated 30.9.2014, Ex.OP1/10 copy of DDR, Ex.OP1/11 copy of claim form, Ex.OP1/12 copy of letter dated 11.9.2014, Ex.OP1/13 copy of claim note, Ex.OP1/14 copy of cheque dated 28.1.2015, Ex.OP1/15 copy of receipt, Ex.OP1/16 affidavit of Er. Bhupesh Bhardwaj, Ex.OP1/17 affidavit of Shri SS Rai, Ex.OP1/18 copy of detail of bill, Ex.OP1/19 copy of bill dated 17.10.2014, Ex.OP1/20 copy of bill dated 10.09.2014, Ex.OP1/21 copy of bill dated 14.8.2014, Ex.OP1/22 copy of bill dated 16.7.2014, Ex.OP1/23 copy of bill dated 14.5.2014 and Ex.OP1/24 affidavit and closed evidence.  The learned counsel for OP number 2 has produced Ex.OP2/1 affidavit and closed evidence.

 

5.             We have very carefully perused the complaint, version of the opposite parties, evidence produced on the file and written submissions and also heard the arguments of the learned counsel for the parties. In our opinion, the complaint merits acceptance, for these reasons.

 

6.             It is an admitted fact of the parties that the complainant got insured his plant and machinery from the OP number 1 through OP number 2 vide cover note number 994896 and 976544.  It is further an admitted fact that a fire took place in the factory premises on 28.8.2014, intimation of which was given to the OP number 1, who appointed the surveyors for spot verification.  It is further an admitted fact that OP number 1 has paid an amount of Rs.44,279/- in the bank account of the complainant.  But, the complainant has filed the present complaint for claiming the remaining amount of claim from the OPs.

 

7.             After hearing the arguments of the learned counsel for the parties and on perusal of the documents placed on record, we find that OP number 1 has settled the claim at Rs.44,279/- only.  The learned counsel for OP number 1 has contended vehemently that as per the exclusion clause number 7 of the policy the loss has been assessed as the policy does not cover loss, destruction or damage to any electrical machine, apparatus, fixture or fitting etc. and it is clear that the fire occurred due to short circuit in the sortex machine and the same was not covered under the policy.  The cabin was assessed for Rs.75,000/- , but applying the method of excess clause, the same comes out to be Rs.44,279/-, which amount the OP number 1 has already paid to the complainant.    We have also gone through the exclusion clause mentioned in the policy document Ex.OP1/1, which is “loss, destruction or damage to any electrical machine, apparatus, fixture or fitting arises from or occasioned by over running, excessive pressure, short circuiting, arcing, self heating or leakage of electricity from whatever causing (lightening included) provided that this exclusion should apply only to the particular electrical machine, apparatus, fixture or fitting so effected and not to other machines, apparatus, fixture or fitting which maybe destroyed or damaged by fire so set up”.  So, OP number 1 has settled the claim considering that the fire broke out in the sortex machine and had not considered the damage of sortex machine in the light of the above exclusion clause.  In the light of above clause, if the fire had originated from some other point, then the loss of the sortex machine could have been covered as per the policy.  But, the question arises whether the OP number 1 has produced any cogent and reliable evidence to prove their version.   We have further gone through the document Ex.OP1/3, which is a spot survey report dated 2.9.2014 obtained by OP number 1 through their surveyor Er. Bhupesh Bhardwaj and from the report in question, we find that the plant was not working at the time when the fire took place.  Further the surveyor has mentioned in the report that ‘the watchman on duty notice that smoke was coming from the plant.  He informed the insured and alongwith him found that the fire started in the cabin where sortex machine was erected’ and from such findings, it cannot be concluded that the fire broke out from the sortex machine as the plant includes cabin as well.  

 

8.             From the above report, it cannot be ruled out that the fire may have broke out due to short circuit and may have first burnt the cabin and then the sortex machine. This report of the surveyor is the outcome of letter dated 28/08/2014 of the complainant on which the surveyor was deputed by OP number 1. In the letter dated 28/08/2014, the complainant has submitted that he saw fire in the sortex machine, but it doesn't suggest that from where the fire had originated, whether it originated from the cabin or from the sortex machine, by the time the complainant noticed the fire then it was coming from the sortex machine and the fact is that the cabin and the sortex machine both have been damaged. If the fire broke out first from the cabin then the damage of the sortex machine is covered as per the exclusion clause 7. But the learned counsel for  OP No. 1 is laying stress that the fire broke out from the sortex machine, we are unable to swallow this version of the OP number 1 because as per the evidence produced by the complainant vide document Ex.C-23, it is clearly mentioned that the seasonal period for a rice sheller shall be during the period 1st October to 30th June next year and as the fire broke out in the month of August, so it can not be said that the sortex machine was operational, at that time, there is no reason to believe that the fire break out from the sortex machine. It could have originated from any other place due to short-circuit. The complainant as well as the OP number 1 do believe that the fire broke out due to short-circuit in which cabin and the sortex machine was burnt.

 

9.             Had the sortex machine been operational, then, there must have been some persons attending the same and working there, but as there was no worker present at the time of fire, so certainly, the sortex machine was not operational and the fire could not have been originated from the sortex machine because from some idle machine, no fire could ever break out and when the power switch of any electric machine is switched off then there is no possibility of any fire break out.

10.            Keeping in view of the facts mentioned above, we donot concur with the report of the second surveyor, which is on record as Ex.OP1/9 in which it has been mentioned that "the fire in the machine started from sortex machine which was installed inside a cabin specifically made for this machine only. It is worth mentioning here that in the fire complete machine along with cabin had been damaged. Moreover, the duty of the surveyor was to submit the report and not to give such a finding with regard to the exclusion clause. Further, the surveyor has also assessed the loss to the tune of Rs.14,70,719.18/- after deducting depreciation and salvage value and we do concur with the findings of the surveyor to this extent but further deduction of this amount on the ground of under insurance factor by the surveyor is not acceptable as there is no such evidence on record to prove it.

 

11.            With regard to the under insurance factor the counsel for  OP number 1 has drawn our attention to the balance sheet as on 31/03/2014 which is duly authenticated by the Chartered Accountant, in which value of the sortex plant has been mentioned as Rs.33,31,099/- and machine is Rs.3,22,000, i.e., total amount of Rs.36,31,099. But, at the same time the learned counsel for the OP number 1 has argued that the claim has been paid less after applying the under-insurance factor because the value of the sortex machine was Rs.48,36,120/- but from the evidence placed on record, we donot find any document in which the price of machine has been mentioned as Rs.48,36,120/-. So, we find that OP number 1 has wrongly applied the under insurance factor in order to deprive the complainant of his genuine claim. Moreover, the insurance has been obtained by the OP number 2 on behalf of the complainant as loan has been obtained by the complainant from OP number 2 and if it is under insurance then it is the deficiency is of the OP number 2 because all the bills and other records were available with OP number 2 being the financer of the complainant.

 

12.            Further, the complainant has specifically mentioned that he was supplied only cover note and no policy and terms & conditions were ever supplied to him either by OP number 1 or by OP number 2 and none of the OPs have placed on record any evidence to the effect that the policy and terms & conditions were ever supplied to the complainant. Even the policy placed on record which is Ex.OP1/1 bears the date as 27/10/2014, whereas, date of cover note which is Ex.C-15 is 02/05/2014. So, it seems that the policy was not supplied to the complainant neither by the OP number 1 nor by the OP number 2, whereas it is the duty of the Ops to supply the copy of the insurance policy to the complainant. 

 

13.            The learned counsel for the  complainant in support of his version, has submitted the copy of extract from internet with regard to the definition of short circuit which says that "defect in circuit or wiring that causes normal electric path to be bypassed resulting in disrupted transmission, overheating, burnout."  But in the present complaint there is no evidence to the effect that the machine was operational and the version of the OP number 1 that the fire broke out from the machine is not admissible in the absence of any reliable evidence as mere hypothetical version of the OP number 1 cannot be relied upon.

 

14.            The OP number 1 while settling the claim has not even considered the report of the surveyor and has finalised the claim as per the report of their Accounts Officer and the same is document Ex.OP1/13 on record and the cover note which is Ex.C/15 has also been issued by the same signatory so, if the OP number 1 had under insured the policy without verifying the bills then it is the fault of the OP number 1 and for the mistake committed by OPs the complainant cannot be penalised because the premium has been collected by OP number 1 directly from OP number 2. The Hon'ble National Commission in M/s. Jai Mata Spinners Ltd. v/s New India Assurance Co. Ltd. Case number 471 Of 2002 decided on 10th March 2015 it has been held that "It is the Op and nobody else who is to carry the ball to prove as to what is the cause of the accident." Further the Hon'ble National Commission in The New India Assurance Company Ltd. v/s Dev Kumar & others Revision Petition no 3459 of 2014 decided on 22nd September 2014 has held that “it would also be appropriate to note here that in the cover note issued by the insurance company, there was no mention of its being a transport vehicle. As far as the insurance policy is concerned that came to be issued much later than the vehicle met with an accident and, therefore, no reliance can be placed on said document particularly when it is not in consonance with the cover note issued by the insurance company”. 

 

15.            The learned counsel for the complainant has further cited the judgement of Hon'ble National Commission titled as United India Insurance Co. Ltd. versus Milap Telecom I(2012) CPJ 138 (NC) has held that the proposal form does not show that the additional premium was required to be paid for the coverage of peril caused due to short-circuiting. This exclusion clause only appears in the conditions which are subsequently annexed with the policy. The appellant failed to establish that the relevant conditions were furnished to the complainant when the insurance policy was issued to him. Further in Oriental Insurance Co. Ltd. versus Brahmdeo Panjiyara 2012(2) CPJ 349 (NC), the Hon'ble Commission has held that the respondent was never informed by the petitioner about the policy conditions which included the Exception Clause, since it was not a part of the main policy supplied by the petitioner and, therefore, respondent could not be bound by any condition or exception which were not explained or made aware at the time of the parties entering into an insurance contract. 

 

16.            Further the Hon'ble Supreme Court of India in M/S Modern Insulators Ltd v/s The Oriental Insurance Co. Ltd has held that as the terms and conditions of the standard policy wherein the exclusion clause was included, were neither a part of the contract of insurance nor disclosed to the appellant, the  respondent cannot claim the benefit of the said exclusion clause.

 

 

17.            The learned counsel for the OP number 1 has also cited New India Assurance Company Limited versus Meena Devi and another 2008(4) CPJ 111 (HP State Commission) , wherein it has been held that the insurance company is liable to pay proportionately on account of insurance in case the stock is under insurance.  But, in the present case, there are no such circumstances, as such, the law cited by the learned counsel for the OP number 1 is not at all applicable in the circumstances of the case.

 

 

18.            So, in view of our above discussion, we find it to be a case of deficiency in service and accordingly, we allow the complaint and direct OPs number 1 and 2 to pay jointly and severally  to the complainant an amount of Rs.14,26,440/- (Rs.14,70,719/- minus Rs.44279/- already paid to the complainant)  along with 9% interest from the date of filing of the complaint i.e. 22.04.2015 till realisation in full. We further direct OP number 1 and 2 to pay to the complainant a sum of Rs.30,000/- on account of mental tension, agony and harassment and a sum of Rs.11,000/- as litigation expenses. This order of ours shall be complied with by the OPs  within a period of thirty days of  receipt of a copy of this order. A copy of the order be issued to the parties free of cost. File be consigned to records.   

                Pronounced.

                December 21, 2015.

                                                        (Sukhpal Singh Gill)

                                                           President

 

 

                                                              (K.C.Sharma)

                                                                Member

 

 

                                       

                                                                (Sarita Garg)

                                                                    Member