DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

Udyog Sadan, C-22 & 23, Qutub Institutional Area

(Behind Qutub Hotel), New Delhi-110016.

Case No.589/2007

Vanasthali Textile Industries Limited

A-34, Sector-2, Noida-201301

District Gautam Budh Nagar, U.P.                            ….Complainant

Versus

United India Insurance Co. Limited

42-C, IIIrd, Floor, Moolchand Commercial

Complex, Delhi-110024                                        ….Opposite Party

                                          Date of Institution     :  16.05.2007                                 Date of Order           :  22.03.2017

Coram:

Sh. N.K. Goel, President

Ms. Naina Bakshi, Member

O R D E R

Ms. Naina Bakshi, Member

The complainant has filed the present complaint for the following reliefs:

1. A sum of Rs.8,85,126.00 wrongly deducted by the OP from the fire claim of the complainant,
2. Interest @ 12% on the amount of claim as from the date of loss until its payment,
3. A sum of Rs.1,00,000.00 towards inconvenience, and harassment undergone by the complainant,
4. A sum of Rs.25,000.00 being litigation expenses.

It is stated that the Complainant is engaged in the business of manufacturing of towels and terry towels. For the said purpose, the Complainant owns, manages and operates a manufacturing unit at Shahjhanpur, Rajasthan. He was regularly insuring its property at Shahjhanpur against various risks like fire, earthquake, riots, and strike etc. from 2002-2003 and 2003-2004. However, during the period 2004-2005 and 2005-2006 it chose to make the OP as leading insurer for its policy. He chose to place with the OP the insurance policy regarding plant and machinery. The policy for plant and machinery was always extended by the complainant to include the benefits of ‘Reinstatement Value Clause’ in which in the event of a loss, the Complainant became entitled to indemnity without application of deprecation. In other words, the policy gave the benefits of ‘new for the old’ in the event of a loss. During the period 2004-2005 the policy was issued by the OP. In the said policy as required by the complainant, the OP extended  it to include the Reinstatement Value Clause. For the year 2005-2006 the policy was again renewed with the OP. The OP issued the policy on the basis of the previous year policy and no new proposals were either asked for or submitted by him but most unfortunately, while issuing the policy the OP omitted to include the Reinstatement Value Clause in the policy for the year 2005-2006. It is submitted that the Complainant could not notice the omission. On 09.12.05, a major fire broke out at the premises of the complainant at Shahjhanpur. The fire started on the 2^nd floor of the premises where the packing section was housed. The fire soon grew and engulfed a sizable part of the factory. The fire brigade personnel also reached the spot in a reasonable time. However, it still took many hours for the several fire tenders and the staff to put out the fire. The Complainant suffered massive loss of all its installations and contents. The fire had very badly affected the plant and machinery. The stock insurance was placed with another insurance company, namely, Bajaj Allianz General Insurance Company whom the Complainant had lodged its claim for the loss of the stock and recovered the payment in good time.  The Complainant had lodged a claim for the loss of plant and machinery with the OP as the plant and machinery affected in the fire were badly burnt and were not fit to be used. Therefore, it was required to be replaced with new machinery.  The Complainant lodged a complaint with the OP. The Complainant realized the mistake which the OP had committed in the policy regarding ‘Reinstatement Value Clause’ omitted from the policy for the year 2005-2006. The Complainant made several visits to the OP to correct the policy with retrospective effect. There was initially an impression given to the Complainant by the OP that the necessary correction shall be carried out and the insurance claim will be adjusted only on that basis.  Therefore, as per the verbal communication of the OP the Complainant had not taken any action. The OP had appointed Mr. Vinod Sharma, surveyor to carry out the survey and assessment of the loss.  As the claim was not settled the Complainant was pursing with the surveyor as well as the OP.  The OP did not carry out its mistake with retrospective effect. The total replacement cost of the plant and machinery was Rs.19,26,578.00. The Complainant has submitted all the bills and cash memos to the OP. The OP, however, refused to consider the demand of the complainant and took advantage of its own mistake and  settled the claim for Rs.859367/- without considering the ‘Reinstatement Value Clause’. The Complainant lodged its protest and sought the OP to review the offer which was promptly declined. The Complainant accepted the aforesaid amounts and gave signed papers in token of having received the amount. It is submitted that after receipt of the cheque from the OP he sent a legal notice to the OP to protest on the mode of settlement adopted by the OP and the Complainant demanded the balance amount of Rs.885126.00 which the OP would have been liable to pay based on the ‘Reinstatement Value Clause’ under the policy. The OP refused to reconsider the payment of deduction wrongly carried out in unlawful manner. Hence, pleading deficiency in service on the part of the OP the Complainant has filed the present complaint with the above prayers.

           In the written statement OP has inter-alia stated that the OP issued the policy to the complainant for the period 16.04.04 to midnight of 15.04.05. The complainant neither issued any letter at the time of getting the policy from the OP No.1 to include “Reinstatement Value Clause” nor objected to after the policy was issued to the Complainant. The complainant raised the issue only after the major fire broke out on 09.12.05 and both the parties were to be governed as per the terms and conditions of the policy issued which forms the law of the contract. The OP is not liable to pay the amount which is against the terms and conditions of the policy documents issued to the complainant. The OP considered the claim of the complainant as per the terms of the policy issued to the complainant. It is denied that the OP omitted the term “Reinstatement Value Clause” in the policy. It is stated that at no point of time the complainant raised any objection with regard to the Reinstatement Value Clause not being mentioned in the policy. It is submitted that on receipt of the claim of the complainant OP deputed Sh. Vinod Sharma, surveyor to assess the actual loss suffered by the complainant and there was no delay in processing the claim of the complainant. After assessment made by the surveyor and also looking into the terms and conditions of the policy issued to the complainant, OP finally arrived at the figure of Rs.859367/- without the Reinstatement Value Clause. The complainant accepted the offer Rs.859367/- made by the OP and signed the papers in lieu of the amount received from the OP and the amount was accepted by the complainant without any protest etc. Therefore, the complainant is not entitled to the balance amount of Rs.885126/- from the OP since the Reinstatement Value Clause was not mentioned in the policy issued and hence the complainant is not entitled to any amount which is against the terms and conditions of the policy. OP has prayed for dismissal of the complaint.

          Complainant has filed a rejoinder and reiterated the averments made in the complaint.

          Complainant has filed the affidavit of Sh. Yogesh Gupta, Company Secretary in evidence. On the other hand, affidavit of Sh. Devinder Singh, Divl. Manager has been filed in evidence on behalf of the OP. 

          Written arguments have been filed on behalf of the parties.

We have heard the oral arguments on behalf of the parties and have also gone through the file very carefully.

Copies of the insurance policy for the year (period) 16.04.2002 to 15.04.2003 and 16.04.2003 to 15.04.2004 issued by the OP to the Complainant haven been filed on the record which we mark as Mark ‘X’ and Mark ‘Y’ respectively for the purposes of identification. The same perhaps contain the term “subject to Bank agreed to R.I.V Clause” (not legible and readable). In any case the policy for the period in question did not contain any such clause. The Complainant never brought this fact to the notice/knowledge of the OP at any point of time. Thus, the insurance contract had been concluded between the parties without there being any such clause in the same. Complainant never brought this fact to the knowledge of OP before the fire took place in the premises and the Complainant had to file the claim before the OP.  Thus, the complainant had a policy with the OP from 2004-2005.  The major fire broke on 09.12.05. The complainant neither issued any letter at the time of getting the policy from the OP No.1 to include the reinstatement value clause nor objected to after the policy issued to the complainant. OP refused to accept the demand of the Complainant regarding containing the Reinstatement Value Clause in the policy retrospectively. The complainant submitted the claim to the OP.   As per the terms and conditions of the policy, the complainant accepted the offer of Rs.859367/- without any protest. Only after receiving the said amount the complainant issued a legal notice to the OP on 08.02.07 (copy Annexure-A for the purposes of identification) wherein the complainant demanded the balance amount of Rs.885126/-.

          In view of the above, it transpires that as per the terms and conditions of the policy the complainant already accepted an amount of Rs.859367/- from the OP without any protest. As the complainant had already received the amount, hence, the Complainant ceased to be a ‘consumer’. The complainant has failed to prove any deficiency in service on the part of the OP. Accordingly, we dismiss the complaint with no order as to costs.

 Let a copy of this order be sent to the parties as per regulation 21 of the Consumer Protection Regulations.  Thereafter file be consigned to record room.

Announced on 22.03.17.