Before the District Consumer Dispute Redressal Commission [Central], 5th Floor ISBT Building, Kashmere Gate, Delhi
Complaint Case No.201 of 30.07.2012
City X-ray & Scan Clinic Pvt. Ltd.
through its Proprietor Dr. Ravi Kapoor
A-12, Vikaspuri, New Delhi-110018
...Complainant
Versus
United India Insurance Co. Ltd. through its
Branch Manager Divisional Office-VII,
10203, Jamuna House, 3rd floor, Karol Bagh,
New Delhi
...Opposite Party
Order Reserved on: 19.12.2022
Date of Order: 27.12.2022
Coram: Shri Inder Jeet Singh, President
Shri Vyas Muni Rai, Member
Ms. Shahina, Member -Female
Inder Jeet Singh
ORDER
1. (Introduction to case of parties) : Briefly, this is a complaint of allegations of deficiency in services that complainant got insured its medical equipment ultrasound machine, however, when the said machine developed some problem, it was not working and component ‘Probe; was to be replaced, the insurer/OP failed to reimburse the amount and repudiated genuine & valid claim. Whereas the opposite side opposed the claim that there was no deficiency in services, it was a case of normal wear and tear and claim was rightly declined.
2.1 (Matrix of case of complainant ) : Complainant Dr. Ravi Kapoor, Proprietor City X-ray & Scan Clinic Pvt. Ltd. is a peace loving citizen, he is operating City X-Ray and Scan Clinic. He took an insurance policy no. 040700/44/11/58/350000022 for period 28.05.2011 to 27.05.2012 (Annexure C-1 to the complaint) from United India Insurance Co. Ltd./OP against premium in respect of ultrasound machine. The said ultrasound machine developed some problem, it was not working, which was informed to service provider Wipro GE Healthcare Pvt. Ltd., who visited and gave their service report along with estimate of Rs. 2,00,000/- for Probe for machine (Annexure C-2 to the complaint). The OP was requested several times through email and by telephone calls for replacing/ removing the defect in the machine; its surveyor Shri Rajesh Kumar Mer gave his report (Annexure C-3 to the complaint) and assessed the root cause for Probe failure due to high voltage fluctuations either while booting up or shutting down and the damage was neither due to electrical nor due to mechanical break down but because of normal wear and tear and in view of the exclusion clause in the policy no claim was made out. The complainant had made all clarifications raised by the OP but instead of reimbursing the claim amount, the OP rejected the claim on false and flimsy grounds (Annexure C-4 to the complaint).
2.2: The OP had indulged into unfair trade practices as instead of rendering sincere services to its customer, the false and lame excuses were taken to deny the valid claim of complainant. The acts of OP are wrong conduct, which have also caused harassment, mental agony and huge financial losses to the complainant; it is liable to compensate the complainant. In fact, the complainant is feeling cheated as the OP played fraud to innocent customers. There is also deficiency in services apart from negligence. Then complainant got served legal notice dated 18.05.2012 (Annexure C-5 to the complaint) to the OP but no result despite its service. That is why the complaint was filed.
2.3: The complainant seeks reimbursement of Rs. 1,99,500/- along with interest at the rate of 18% pa in its favour and against the OP in respect of the Probe apart from damages/compensations of Rs. 2,00,000/- on account of pains, mental agony and harassment suffered by him.
3.1 (Matrix of case of OP) : The OP filed its detailed written statement along with supporting affidavit. The supporting affidavit is of 16.11.2012 but there is no written statement of 16.11.2012, however, written statement filed is of 20.11.2012.
3.2: The plea taken in written statement can be divided into three division - firstly some facts are admitted and not disputed, like the complainant City X-ray & Scan Clinic Pvt. Ltd. was issued the insurance policy, mentioned above, in respect of ultrasound machine and it was also for the period mentioned by the complainant. There was visits and reports by the service provider- Wipro GE Healthcare as well as by OP’s surveyor at the site to ascertain the root cause of the problem in the ultrasound machine.
3.3: The other set of plea in the written statement is pertaining to legal issue that there is an arbitration clause in the insurance policy & this Consumer Commission lacks jurisdiction on the subject matter; episode of breakdown of ultra sound machine is of some previous date of December 2010 and claim was lodged with other insurer/National Insurance Company by the complainant for same problem. Complainant’s grievances are against service provider and not against the OP. There is an arbitration clause in the insurance policy and in view of the same the matter is to be adjudicated by the arbitrator, the present Commission lacks jurisdiction to adjudicate the present complaint.
3.4: With regard to other facts, the OP opposed the complaint that in respect of same ultrasound machine having no. DO 3188, the complainant took claim from another insurer- the National Insurance Company in December, 2010 on the last policy and this complaint has been lodged again in respect of same ultrasound machine. There was also discussion with the doctor handling the ultrasound machine and there is also difference of episode as in the claim form date mentioned was 13.08.2011 but during discussion, the date mentioned was 07.12.2010 for which claim was received from the previous insurer. The ultrasound machine was put to extra load over and above the limit, because of it the damage was caused. When surveyor checking the machine and comparing with the voltage system as provided to the machine, he discovered that the damage was not due to mechanical break down as there was no electronic/ mechanical components inside it, it was damaged due to normal wear and tear of the machine as per life span of machine 6-7 years. Further, the cause of damage to the Probe of the machine was because of high voltage fluctuation while booting up or shutting down and high voltage fluctuations of Probe circuitry caused erratic behavior of crystal, which results of overheating and swelling of Probe member. The OP further denies the allegation of complaint of cheating, harassment etc. it reaffirms its stand based on the opinion and survey done by its surveyor.
4. (Replication of complainant) : The complainant filed replication that the objections being taken in the written statement are false and wrong, there was breakdown of the machinery and complaint is reaffirmed as correct; the OP was informed about the loss/ damages well in time and there was no previous claim from any other insurer.
5.1 (Evidence of parties) : Complainant, Dr.Ravi Kapoor led his evidence by way of affidavit on the lines of complaint and documents annexed.
5.2 On the other side, Shri Subey Singh, Deputy Manager of OP, who is author of the written statement, led evidence by way of affidavit on behalf of OP, reliance has been placed on report of surveyor apart from other facts mentioned in the written statement.
6. (Submission of Parties) : Both sides have filed their written arguments and Shri B.S. Bora, Advocate on behalf of complainant and Shri Gurmeet Singh, Advocate for OP have also made their oral submissions. Their submissions are not repeated here, the same will be referred at appropriate discussion of the case.
7.1 (Findings) : The contentions of both the sides are considered, keeping in view the material on record, the oral contentions on point of law and evidence of the parties. At the outset, there is no dispute of relationship of Insured and the Insurer between the complainant and the OP respectively, the policy was issued in the name of Complainant by the OP. Since, there are some legal issue raised, these issues are taken firstly and thereafter other disputed points will be considered.
7.2: (On the point of arbitration clause & jurisdiction of Commission on subject matter) - This point is raised by the OP that since there is an ‘arbitration clause’ in the insurance policy, it constitutes an arbitration agreement, therefore, the matter is to be adjudicated by an Arbitrator; the compliant is liable to be dismissed as the Commission lacks jurisdiction. Whereas Ld. Counsel for complainant has reservations that the present Commission is competent to decide the complaint, because the Consumer Protection Act is special statute, it is for the welfare of the consumer. This complaint is already an old matter and there is also no scope for its adjudication by an Arbitrator.
7.2A: A question is raised, by OP, 'whether it bars the Jurisdiction of Consumer Commission/Fora, in case there is an arbitration clause in the insurance policy to refer the dispute, if so arises, to Arbitrator and consumer complaint is liable to be dismissed'?
To answer this question, it needs discussion from the point of the Arbitration and Conciliation Act 1996 as well the Consumer Protection Act, whether erstwhile Act of 1986 or the current Act of 2019 apart from the law laid down in precedents. It is matter of discretion of parties to enter into arbitration agreement or to include arbitration clause in the agreement to resolve the dispute, if so arises, through Arbitrator. The Arbitral Tribunals are private fora, which are chosen by the parties out of their volition to get determined their dispute, in place of public form of Civil Court and other tribunals. When, there is such agreement between the parties, matter is to be referred to Arbitrator by the judicial authority in terms of section 8 of the Arbitration and Conciliation Act 1996 in case civil suit is filed in the court. The Arbitrator has to follow the provision of the Arbitration and Conciliation Act 1996. Arbitrator gives its final findings as an Award. There is also remedy provided in the Act, 1996 itself if one is feeling aggrieved from such Award, however, it is subject to fulfilling the conditions laid down. Section 34(2)(b) and sec.48(2) of the Arbitration and Conciliation Act 1996, makes it clear that arbitral award may be set aside if the court finds that subject matter of the dispute is not capable for settlement by the arbitration under the law for the time being in force or award is in conflict with the public policy in India.
By looking into Consumer Protection Act 1986, this Act does not specify non-arbitral matters. However, on the principle that adjudication of certain categories of proceedings are reserved by legislature exclusively for public fora as a matter of public policy, e.g. dispute relating to rights and liabilities which give rise to or arise out of criminal offences; matrimonial disputes relating to divorce, judicial separation, child custody, restitution of conjugal rights; guardianship matters; insolvency and winding up matters; testamentary matters (probate, letter of administration and succession certificate) and eviction of tenancy matters, which are governed by special statute, as held in Booz Allen and Hamilton Inc Vs SBI Home Finance Ltd 2011 5 SCC 532.
A situation, alike question in hand, had arisen in M/s Emaar MGF Land Ltd Vs Aftab Singh [decided on 10.12.2018 in Review petition (C) no.2629-2630 in civil appeal no. 23512-23513] wherein the revision petition was dismissed by holding that the arbitration clause in buyer's agreement is not a bar to resolve dispute by Commission, while relying upon the Act that provisions of Act are in addition to and not in derogation of other law in force (sec. 3 of Act 1986) and also on the basis of previous decisions inclusive of case Booz Allen and Hamilton Inc (supra). Sec. 100 of the Act 2019 is identical to section 3 of erstwhile Act 1986. Since, section 8 of the Arbitration and Conciliation Act 1996 was amended in 2015 and it was also discussed that it would also not affect the position because of amendment of 2015 in section 8(1) of the Arbitration and Conciliation Act 1996, that notwithstanding any decree or order of Supreme Court or other Court, the matter is to be referred to arbitration unless court finds prima facie that no valid arbitration agreement exists. To say, in Emaar MGF case, the reasons and objects of Bill of proposed amendment of 2015 in the Arbitration & Conciliation Act 1996, was also discussed to ascertain what was impetus for proposed amendment. It was discovered that in order to smooth and expedite the arbitration proceedings by least judicial intervention from the point of filing copy of agreement, section 8 was amended. It is never the move in objective of amendment to oust the jurisdiction of Consumer Commissions.
The Consumer Protection Act gives definition of 'service', it includes 'insurance' and it is within the policy of legislature that it has been kept within the purview of the Consumer Protection Act. In this present case, if the contention of OP is accepted, because of an 'arbitration clause' in the insurance policy, then it would defeat the very objective of the Consumer Protection Act 'of better protection of interest of consumers' and it would also mean by 'inserting arbitration clause' in the insurance policy, would implies that agreement between the parties would waive or forfeit the rights of Consumers from filing the consumer complaints or from invoking the Consumer Protection Act, which is not the intention of legislation enshrined in the Preamble of the Act 1986 or Act 2019. Thus, it is held that arbitration clause in the insurance policy would not bar from filing Consumer complaint nor it would be construed to oust the jurisdiction of the Consumer Commission as provisions of the Consumer Protection Act are in addition to other provisions of other law and not in derogation thereof. In precedent Skypak Courier Ltd Vs. Tata Chemicals 2000 5 SCC 294, it was held "that even if there exists an arbitration clause in an agreement and complaint is made by consumer in relation to a certain deficiency of services, then the existence of an arbitration clause will not bar to entertain the complaint by Redressal Agency, constituted under the Consumer Protection Act since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force"
Accordingly, this point is determined against the OP and the consumer's complaint cannot be dismissed on this ground. This District Consumer Dispute Redressal Commission has jurisdiction to adjudicate this consumer's complaint despite arbitration clause in the insurance policy. Now, other points are being taken one by one.
7.3:(points of date of episode & of previous claim from other insurer): OP contends another issue of date of episode as well as making claim in respect of same episode to the another insurer-National Insurance Company in December, 2010 in respect of the same ultrasound machine having same problem. In the claim form the date of episode mentioned was 13.08.2011 but the problem was of 07.12.2010. On both counts the complaint is false and it is liable to be dismissed.
Whereas the complainant opposed both the submissions that as per documentary record of 16.08.2011, the problem had emerged of total black out in 4C Probe and then service provider as well as insurer were informed thereof immediately. There is no proof by the OP of making any claim previously from National Insurance Company, these objections are being taken to deny the valid claim of complainant.
7.3A. The submissions of both the sides are self-explanatory. The OP has placed much emphasized reliance on the surveyor report as well as that there was claim raised to National Insurance Company in December, 2010. Since the OP’s surveyor had conducted the survey by visiting the site and otherwise also, but no detail has been furnished by the OP that complainant had actually lodged any claim in December, 2010 to the National Insurance Company. This Insurer/OP is in public sector in the field of insurance and similar is the status of National Insurance Company, it was not difficult for the OP to secure and prove the record if the complainant had actually lodged any claim in respect of medical equipment ultrasound machine in December 2010. To that extent there is no merit in the plea of OP.
So far furnishing of date of 13.08.2011 in the claim form is concerned, the OP will not derive any benefit, firstly it could not establish that there was same problem in December 2010, secondly, the complainant had informed the service provider about problem in ultrasound machine, the service provider had visited the site on 13.08.2011 and found problem in the equipment, it was opined that Probe needs replacement due to electronic failure. The report of service provider is part of the complain, that ultra sound machine was attended and it was diagnosed of the problem. Accordingly, the plea of OP has not been established in this regard. The documentary record proved by the complainant establishes that the episode was of 13.08.2011.
7.4:(Against whom grievances are alleged?) : The OP had emphasized that actual grievance are against the service provider and service provider is Wipro GE Healthcare Pvt. Ltd. but the complaint was lodged wrongly and falsely against the OP/ insurer. Whereas, the complainant opposed it vehemently that nowhere in the complaint there is any such plea of grievance against the service provider but throughout the allegation of unfair trade practice and of deficiency in service are against the insurer/OP.
7.4A : On plain reading of material paragraph of allegations of paragraph 7 to 12 of complaint, the allegations are against the insurer/OP. there is no allegation either in the complaint or in the documents annexed against service provider. Therefore, the contentions of OP are baseless.
7.5: (Other disputes points) : The Ld. Counsel for OP contends that the Insurance policy was issued in respect of brake down of hardware being covered by the policy and the software is not covered in the said policy. The terms of policy are also mentioned on the face of insurance policy, which specifically explains that term equipments include entire computer system consisting of CPU, Keyboard (s), Monitor (s), Printer (s), Stabilizer (s), UPS and another note is also given that software is not covered under the policy. In addition, it is a case of natural wear and tear, the so called damages cannot be considered as the subject matter of insurance. The surveyor has given a detailed report and analysed the circumstances of ultrasound to reach the cause of damages, which was discovered to be natural wear and tear. It is concluded that as a matter of fact it is a case of failure of the software, which is not covered in the insurance policy. The complaint is liable to be dismissed.
Whereas, Ld Counsel for complainant has reservation to the plea taken by the OP, it is not a case of natural wear and tear but there was failure of the ultrasound machine, which was analyzed by the service provider and it was specifically opined that probe needs replacement due to electronic failure, the OP cannot substitute its opinion, secondly the Service Provider's Engineer has also opined that in case to get the analyses of root cause of failure of Probe, the defective Probe is to be exported to the manufacturing center in Austria, who has tool & infrastructure to opine, and all expenses for sending the item abroad and shipping charges etc. are to be borne by the insured, which are also known to OP. Under this situation, the surveyor had no reasons to come to make conclusions that it was a case of natural wear and tear without scientific analyses by the experts or the manufacturer of the said medical equipment component. The claim is valid and genuine, however, it is being opposed as if it were a case of natural wear and tear.
7.5A: The contentions of both the sides are compared and analyzed in the light of material on record. On 13.08.2011 the complainant had informed the service provider M/s Wipro GE Healthcare Pvt. Ltd., who through its engineer Sh. Prateek Kumar visited the site and inspected the ultrasound machine, it was diagnosed "Probe was checked and found not working due to electronic current failure" and in the same report it was advised "Probe needs replacement due to electronic failure". There is no material by the OP to opine contrary to the findings arrived by the service provider in its report dated 13.08.2011. Further, the said Engineer Prateek Kumar was also called and inter-acted by the surveyor of OP, apart from, it was also advised by the service provider in its letter dated 29.11.2011 that in case the root cause of failure of Probe is to be analyzed then it is to be sent to manufacturing center in Austria. The surveyor of the OP has his own opinion and observation by visiting the site as well as by analyzing the ultrasound machine, whereas it is not the conclusive opinion, since there is also report by the service provider which also cannot be avoided. Further, the OP is taking another plea that it was not covered under the policy either software is not covered or it was not breakdown of the ultrasound machine, whereas the surveyor has assessed the loss of medical component of Probe, on page 9 of the report. The OP contents that the failure of Probe was due to high voltage fluctuations of Probe Circuitry caused erratic behavior of crystals, but there was no scientific conclusions, nor the service provider who also visited the site and examined the ultrasound machine, had opined so or soft ware failure nor there is any expert opinion by the manufacturing center. Therefore, by taking stock of all these circumstances, it does not establish the case of OP but proves the case of complainant that the Probe was not working due to electric current failure. The equipment was to be replaced due to electric failure. It is covered in the policy. The other plea of OP is also taking paradoxical plea, which is defensive, as on the one hand it is stated that ultrasound machine has life span of 6-7 years, damage was normal wear and tear and at the same time, the policy was undertaken by the OP; such plea carries no weight. The complainant has proved its case and amount claimed is within sum insured.
7.5B: The policy period was from 28.05.2011 to 27.05.2012, the date of episode is of 13.08.2011 which is after about 2-1/2 months from the date of policy. The surveyor had assessed the 45% of depreciation on value [of the 4Cd Probe] Rs.1,99,500/- and after depreciation and salvage, the amount arrived is of Rs.99,489/-. It has not been deciphered in the report or otherwise as to how the depreciation of 45% invoked. Whereas from the date of commencement of the policy from 28.05.2011, the period is of 2-1/2 months till the date of episode, which comes to about 25% period, thus it is appropriate to consider this period for the purposes of depreciation. Therefore, by reducing 25% (i.e Rs.49,875/-) from amount of Rs.1,99,500/-, the remaining amount comes to Rs.1,49,625/-, for which the complainant is held entitled in lieu of medical equipment component as its reimbursement against the OP.
7.6: From the circumstances, it is very much clear that the complainant has been pursuing his claim, under all odds, trauma, stress, however, the efforts of complainant had not succeeded and that is why it was constrained to file the complaint, thus a lump-sum damages of Rs.25,000/- in favor of complainant and against the OP will meet both ends of justice.
7.7. Simple interest @ 6% p.a from the date of complaint till realization of the amount is allowed in favor of complainant and against the OP, keeping in view that the complainant had to bear the replacement of component.
7.8: Accordingly, the complaint is allowed in favour of complainant and against the OP, while directing the OP to pay Rs.1,74,625/- [Rs.1,49,625/- plus damages of Rs.25,000/-] along-with interest @ 06% pa from the date of filing of complaint till realization, The OP shall pay the amount to complainant within 30 days.
8: Announced on this 27th day of December, 2022. Copy of this Order be sent/provided to the parties free of copy as per Regulations.
