Meghalaya

StateCommission

CC 02/2010

R.N.B. Carbines & Ferro Alloys Ltd - Complainant(s)

Versus

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

Mr.S.Rana

20 Dec 2022

ORDER

MEGHALAYA STATE CONSUMER DISPUTES REDRESSAL COMMISSION

                      SHILLONG

 

C.C No.2 of 2010

 

BEFORE

 

Hon’ble Mr.Justice(Retd) S.Pandey PRESIDENT

 

Learned Member : Shri W.Khyllep

 

        Learned Member : Shri C.P.Marak

 

Learned Member : Shri W.Synrem

 

Learned Member : Dr. G.B.M Mihsill

 

 

RNB carbides and Ferro Alloys (P) ltd.,

Jeep Stand, Bara Bazar Shillong – 793002

District East Khasi Hills, Meghalaya,

Represented by its Director Shri Gaurav Bajaj                                             

                                       ...Complainant

                      -versus-

 

The United India Insurance Co.Ltd.

Danish Road,Pan Bazar,Guwahati - 1

Through the Divisional Manager,

United India Insurance Co.Ltd.,

Divisional Office, Laitumkhrah,

Shillong - 3

                                      ...Opposite party

 

For the Appellant     :   Shri S. Rana, Advocate

For the Respondent    :   Shri. S. Jindal, Advocate

                         

 

Date of Judgement & Order :

 

Whether to be reported    :

 

 

 

A complaint case has been filed under Sections 17 & 18 of the Consumer Protection Act, 1986 read with the Consumer Protection Rules, 1987 and Consumer Protection Regulations, 2005, where the relief has been sought for Rs 32,13,731 from the United Insurance Company Limited (sole OP). The Complainant Company is engaged in industrial activity, established a production facility at Barapani Industrial Area, Barapani Meghalaya. In order to protect the electrical gadgets such as instrument and essential appliances, the Complainant Company made a proposal to the Insurance Company for availing the Insurance coverage in the production activity at Barapani Industrial Area. The proposal was accepted by the Insurance Company (OP) and in turn, the Insurance Company (OP) issued a Standard Fire and Special Perils Policy bearing No 130105/11/09/11/00000053(‘the policy’). In consideration for issuance of the insurance coverage policy issued by the Insurance Company, the Complainant Company started making payment of policy premium of Rs 7,875 in addition to other usual charges applicable. The said policy covered all types of electrical transformers and its accessories situated at the production facility of the Complainant at Barapani Industrial Area including the furnace transformer for a sum of insured amount of Rs 50, 00,000. The electrical transformers of 3.60 MW were covered for a sum of insured of Rs 25,00,000. Thus the total sum insured were Rs 75,00,000. Further, the said policy covered various risk and one of which mentioned in Section 1 of the terms and conditions of the policy was ‘fire’, excluding destruction or damage caused by certain specific situations mentioned in the said Section 1. The Company had installed a transformer of 6.0MVA,33/0.07-0140 KV furnace transformer at its premises in Barapani Industrial Area and the said transformer was also covered under the insurance policy for a sum sum insured of Rs 50,00,000/-. The transformer was purchased for a sum amount Rs 44,53,680 from and installed by the Kirloskar Electric Company Ltd, Bangalore. It is further mentioned in the complaint application, the incident of fire took place on 15.12.2009 in the transformer at the premises of the Complainant Company which was extinguish with the help of the workers using sand buckets which were available inside the transformer room. The investigation revealed that the transformer had developed some leakage due to which oil from the side of the transformer had started coming out, due to heavy heat near the riser plate, the oil caught fire and travelled inside the transformer. Consequently, the windings inside the transformer were burnt, resulting transformer stopped working. The said incident was informed to the Insurance Company vide through email dated 17.12.2009 mentioning therein is as follows:

 “This is to inform you that our 6 MVA transformer developed some major problem day before yesterday in the evening. There was a tap changer problem initially and Engineers from EASUN – MR, Chennai has inspected the transformer. The snap action switch was found to be defective. They had replaced the same, but after this also the transformer was not working. KIRLOSKAR Engineers are suspecting that the main coils have burnt out and are scheduled to visit the site within 2-3 days.”

         Plea has been taken by the Complainant that the email information was sent without any comprehensive investigation having been done, so the real reason for the breakdown of the transformer could not be given correctly rather referred to a tap changer problem wherein action switch had been found to be defective by engineer of EASUN-MR Chennai was replaced by new but without any result. In the mean time, the complainant Company informed the Kirloskar Electrical Company Bangalore about the fire which had taken place in transformer. The Kirloskar Company deputed two engineers Mr Balaji Gupta and Mr. A. Thangaraj to visit the site of the Complainant and conduct an investigation. Accordingly both engineers visited the site conducted inspection from 31.12.2009 to 03.01.2010. Subsequent to their inspection, both engineers held the meeting with the Complainant Company represented by Mr Rahul Bajaj on 03.01.2010, where the findings of the inspection was discussed and it was pointed out by the engineers of the said Company that the  auto transformer winding has been damaged  and required to be repaired.

         As per the view of the engineers, the transformer was shifted to Kirloskar Electrical Company Bangalore for rewinding. Out of two engineers one shri Balaji Gupta one of the member of inspection team gave certificate dated 03.01.2010, where he mentioned that some leakage was developed due to which the oil from inside the transformer started coming out due to heavy heat near riser plate the oil caught fire and travelled inside the transformer. The workers of the RNB Carbides extinguish the fire after sometime by using the sand buckets which were available inside the transformer room. Since the fire had already travelled inside and windings were burnt resulting the transformer stopped functioning.  In the said certificate, it has been mentioned that engineers had visited the site and checked the transformer and found that transformer windings (coils, insulations, oil) had very distinct flame marks on it. This lead to burn of windings this is due to fire and not of short-circuiting. The conclusion was arrived that the windings burnt out due to fire and the same was required to be replaced, completely. Necessary action was taken to do the needful.

         The Complainant Company made payment of Rs 66,180.00 as charged of engineers who visited and made the inspection. In the mean time, the Insurance Company appointed M.P. Hansaria & Co, Dibrugarh to conduct the survey of the loss. The Surveyors inspected the site on 10.01.2010 & 11.01.2010 later on issued, letter dated 21.01.2010 (wrongly mentioned as ‘2009) to the Complainant Company for submission of the documents mentioned in the said letter. In the said letter, some information was sought from the Complainant Company with respect to email which was sent by the Company wherein was mentioned some problem with tap charger and breakage of snap switch, not mentioned about the leakage of oil and fire.  The Hansaria & Company requested the Complainant Company to explain as to why this fact was not mentioned in the email in as much as requested submission of nine documents. The Complainant Company submitted the documents mentioned therein but did not give explanation about not mentioning of fire in the email sent to the Insurance Company.

 

The Complainant made a formal order on 11.01.2010 for rewinding of the auto transformer, wherein cost has been mentioned for Rs 24,27,152.00, pursuant to which an amount of Rs 11,03,551 being 50 % advance, was deposited in the bank. In turn, accepted the request showing the balance amount of Rs 13,23,602/- payable. The Complainant hired ABC India Ltd for transporting the transformer to Kirloskar Electrical Company Bangalore for which they have charged Rs 63,150. After repair, the Complainant Company paid rest amount of Rs 13, 23,602, thereby incurred the cost of Rs 26, 78,731 as repairing charges including transportation charges to and fro from Barapani to Bangalore. The Insurance Company vide latter dated 01.07.2010 communicated to Complainant Company, the claim of the company stood closed. The reasons stated in the said letter are as follows:

1. In spite of letter and reminders sent to you, you have not complied with the required papers/ documents.
2. As you have withdrawn your claim by giving your consent through your letter dated, we are closing your claim file as NO CLAIM.
3. We are closing your claim file on account of the following reason :

THE CAUSE OF LOSS IS NOT COVERED BY THE POLICY.

         In the complaint petition, relief of Rs 32,13,731.00 has been made by the Complainant. Opposite party has appeared and filed its written statement in which denied the claim of the Complainant. The facts mentioned in the written statement are as follows:

The Insurance Company has not denied coverage under the Standard Fire and Special Perils Policy for the period from 29.04.2009 to 28.04.2010. The policy taken by the Complainant Company covered the risk to the transformer arising out of fire but damage caused to the transformer as a result break down of the machinery was not covered under the Standard Fire and Special Perils Policy. The Insurance Company has pointed at para III of para 6 of written statement the conflicting statement made in para 5 of the complaint petition wherein it has been mentioned that incident of fire took place on 15.12.2009 at the premises of the Complainant Company concerning the said transformer, the workers of the Complainant Company after sometime extinguished the fire by using sand buckets which were available inside the transformer room. The Company sent the email on 17.12.2009 Annexure 4 of the complaint petition wherein it has been mentioned that in 6 MVA transformer developed some major problem day before yesterday  in the evening. There was a tap changer problem initially and Engineers from EASUN – MR, Chennai had inspected the transformer. The snap action switch was found to be defective. They had replaced the same, but after this also the transformer failed to work. KIRLOSKAR Engineers are suspecting that the main coils have burnt out and were scheduled to visit the site within 2-3 days.

On 18.12.2009, The Complainant Company sent intimation letter dated 18.12.2009 to Insurance Company about of transformer problem, describing the cause in the following term:

The tap changer of transformer developed some problem, snap action switch got broken which led to tap malfunctioning and in turn has burnt the main coil inside. The engineer of the tap changer company M/S EASUN-MR Chennai had visited the site on 16.12.2009 and changed the snap action switch. The engineer from Kirloskar Electrical Bangalore reached the site on 21.12.2009 to assess the extent of damage and do the necessary repair work. The plea has been taken by the Insurance Company that in the said communication no incident or description of fire has been mentioned.  The Insurance Company appointed the surveyor M.P Hansaria & Co Dibrugarh to analyze and give complete report about the incident. The said Surveyor wrote a letter dated 21.12.2009 and asked to answer all the queries made in the said letter. It has been mentioned that queries made by the Surveyor was not replied by the Complainant, but enclosed the statement of operator dated 16.12.2009 recorded by In-charge (Annexure-B) with the reply dated 10.04.2010 wherein mentioned, the transformer developed some leakage due to which the oil from inside started leaking. Due to heavy heat near the riser plate, the oil caught fire and damaged the transformer coil. The fire was brought under control by the use sand buckets which were available inside the transformer room. The Insurance Company appointed M.P Hansaria Company Surveyor. Mr M.P. Hansaria inspected the damaged transformer on 09.01.2010 and 10.01.2010 at Beltola Guwahati. Surveyor found that the winding of the auto transformer were damaged. The damaged coils were visible and the photographs of the said coil were also taken. Final report dated 05.06.2001 was submitted by the Hansaria Company wherein it has been mentioned that coil was damaged not on account of fire as he did not find  mark of burning in the tank. Mentioned in the report that the coil was damaged due to the electrical break down which is outside of the cover of the policy? The Insurance Company attached the final report of the Hansaria & Company in the written statement wherein details of the fact has been mentioned and findings has been recorded by the said Surveyor in the following manner, “1.Although I have drawn an assessment, but this does not imply that the liability of the insurers is established. The claim has been lodged under Fire Policy, and I have not noticed any signs of fire. In my opinion, the loss has occurred due to an electrical breakdown and hence no liability attaches on the insurers under the policy. 2. In payment vouchers, the insured has mentioned the name of the insurance company as The Oriental Insurance Co Ltd. This appears to be a mistake, since the claim form of United India Insurance Co Ltd has been filled up”.

In the present case the following issues has to be decided.

1. Whether the Complainant Company has made out a case that damaged of coil of transformer fall under the coverage of insurance policy. If so what amount the complainant company is entitled?
2. Whether the claim of insurance made in the complaint petition is outside the coverage of policy as it falls under the exception mentioned in the in general exclusion item No 7.?

 

3. Whether the coil transformer was damage on account of fire or electrical breakdown which makes the claim outside coverage of Insurance Policy?

 

In support of the claim, the claimant had annexed documents:

1. Annexure 1 is the Standard Fire and Special Perils Policy.
2. Annexure 2 is the bill raised by the Kirloskar Electrical Company showing the cost of repair of the transformer for Rs 44, 63,680.
3. Annexure 3 is the guarantee certificate issued by the Kirloskar Electrical Company Ltd.
4. Annexure 4 is the report dated 17.12.2009 communicated by the Complainant company.
5. Annexure 5 is the minutes of meeting between representative of Complainant Company and Kirloskar Electrical Company Ltd dated 03.01.2010.
6. Annexure 6 is the certificate dated 03.01.2010 granted by Balaji Gupta (Engineer Transformer Servicing)
7. Annexure 7 is the letter No. KEC/SER/TRF/RNB dated 04.01.2010 written by the Kirloskar Electrical Company Ltd to the Complainant requesting for the following items from their end.
8. Annexure 8 is the cost for transportation mentioned as Rs 66,180.
9. Annexure 9 is the letter dated 21.12.2009 by M.P Hansaria Company requesting to give information and also supply the documents.
10. Annexure 10 is the letter dated 10.04.2010 of Complainant Company whereby documents were to supplied to Hansaria & Co Surveyor.
11. Annexure 11 is bill for the cost of transportation.
12. Annexure 12 is the letter written by the Complainant to the Kirloskar Electrical Company whereby placed the order for re-binding of auto transformer and mentioned deposit of Rs 11, 03,501 as an advance amount paid to Kirloskar Electrical Company.
13. Annexure 13 is the order of acceptance, receipt which shows the amount raised by Kirloskar Electrical Company of Rs 24, 22,153.
14. Annexure 14 is the bill raised by the Kirloskar Electrical Company after repair.
15. Annexure 15 is the receipt showing payment of balance amount.
16. Annexure 16 is the claim made by the Claimant company for reimbursement of cost incurred in 7 repair of Rs 26,78,131.
17. Annexure 17 is the repudiation letter.
18. Annexure 18 is the request for review of rejection communicated to the Complainant Company.

 

From the side of the Opposite Party Insurance Company annexed the following documents:

 

Annexure A is the letter dated 18.12.2009 written by Managing Director of the Complainant Company addressed to the Insurance Company Opposite Party.

 

Annexure B is the letter dated 16.12.2009 mentioned the statement of operator recorded by In-charge, describing the cause of damaged of coil in detail.

 

Annexure C is the final report of Hansaria & Co.

 

In the present case, from the side of the Complainant, no witness has been examined, but the Opposite Party has examined M.P Hansaria & Co Surveyor which was appointed to assess the loss caused due to burning of coil of Transformer, and that report has been proved marked as ‘exhibit 1’ and photographs of the damaged coil were taken, proved, marked as ‘Exhibit 2’. For convenience all issues would be dealt with together.

ANALYSIS OF FACTS AND LAWS

    Claim has been made by the Complainant Company that the coil has been damage on account of the fire. For that we have to examine the documents annexed to claim application and to find out as to whether claimant could made out and substantiate its claim. It will be useful to consider letter dated 17.12.2009 (annexure 4) wherein the company has mentioned that the transformer developed some major problem day before yesterday in the evening.

 There was a tap charger problem initially; engineer from EASUN-MR Chennai had inspected the transformer. The snap action switch was replaced but even thereafter the transformer failed to respond. This information was sent to the Insurance Company through emails. In this letter the Complainant Company has not mention anywhere about the fire which damage the coil of the transformer.  Annexure 5 is the minutes of meeting wherein representative of Complainant Company has put his signature as well as the two engineers deputed by the Kirloskar Electric Company namely Shri Balaji Gupta and A.Thangraja have also put their respective signatures wherein also nowhere mentioned about the burning on account of fire. Later, one of the member Shri Balaji Gupta has given a certificate (Annexure-6) in the manner ‘To whom it may concern’ wherein it has been  mentioned that on account of leakage of oil inside the transformer which started coming out of the transformer and due to heavy heat near the riser plate caught the fire and travelled inside the transformer, the same could be extinguished after sometime with the help of the laborers who used the sand bucket which was kept inside the transformer room , thereby the coil was damaged on account of fire resulting in stopped functioning of transformer. It is important to note that Shri Balaji Gupta has not been examined as witness. to prove the document, and one more thing is there; if there has been a report to representative of Kirloskar Company there should have been signatures of both engineers of the company. It cannot be treated to be the report of inspecting team of Kirloskar Electric Company after conducting the inspection as it does not bear the signatures of both the engineers of the Kirkoskar Electric Company, but singularly Mr. Balaji Gupta has given certificate. The minutes of meeting does not mention the burning of coil on account of fire. The certificate dated 03.01.2010 granted by Shri S.Balaji Gupta is incompatible with the Minutes of meeting dated 03.01.2010 with representative of Company with members of inspecting team. It does not stand to the reason why this fact was not mentioned in the minutes of meeting or why singularly Mr Balaji Gupta has sent his certificate. No explanation from the Complainant Company is coming in as much as the Complainant Company has not brought final inspection report submitted by the Inspecting Team to the Kirloskar Electric Company, in order to substantiate its claim. It is also relevant to mention the queries sought by the Hansaria & Co has not been replied by the Complainant Company, but the documents which were sought were supplied as demanded by Hansaria & Co. It appears from annexure A, a letter dated 18.12.2009 written by Shri Rahul Bajaj, Managing Director to the Insurance Company wherein also not mentioned of burning coil on account of fire. Rather it has been stated that the tap charger of transformer developed some problem and snap action switch got broken. This led to the tap malfunctioning in turn has burnt the main coil inside. This letter specifically mentions about cause of burn of coil Whereas the statement of operator recorded by In charge dated 16.12.2009 (Annexure B) has been mentioned fire burnt the coils, both are incompatible to each other in view of the fact statement of cause of burning of coil had been mentioned in both documents, one vital fact comes to our mind, the Managing Director has not mentioned the incident of fire in his letter in as much as for substantiating the claim made by the Complainant, no person has been examined  to prove the document, especially Shri Balaji Gupta who had authored the certificate (Annexure-6) in favour of Complainant Company nor the In charge recorded the statement of operator (Annexure B) nor a single laborer has been brought to substantiate the claim made by the Complainant. The Law well settled that while deciding such matter the Provisions Indian Evidence Act does not strictly applicable, but while deciding such cases, this tribunal/commission cannot ignore the principle laid down that the probative value of evidence would not be ignored, while deciding such cases principle of Preponderance and probability of evidence would be taken, is applicable. In this context it is to be kept in mind that the report of the Surveyor should be given respect but not to be worshiped, cannot be treated to be the final authority but be looked into with care and caution, in as much as finding of fact cannot be brushed aside, unless some arbitrary finding have been recorded without any reason or without any basis.

In the case of M/S Oriental Insurance Company Ltd  versus Mehta Wool Store CPR 2008(2) 46 (NC) where the Hon’ble Judge has said in para 9 ” The Surveyor are independent assessors and their report has to be given due importance and weightage  unless there is overwhelming evidence to the contrary. It is not correct to say that Insurance Company has not produce any evidence on record to show that the loss suffered by the Complainant was not actually Rs 99,097. The Surveyor’s report itself is an evidence produce by the Insurance Company to show that the loss incurred was to the tune of Rs 47,664. It is for the Complainant to prove that he had suffered higher loss, which he has failed to do so.”

 

In the case Malay Kumar Ganguly versus Dr Sukumar Mukherjee and Others (2009) 9 Supreme Court Case 221 para 43 where the Hon’ble Supreme Court has said that ”Apart from the procedures laid down in Section 12 and 13 as also the Rules made under the Act, the Commission is not bound by any other prescribed procedure . The provision of the Evidence Act are not applicable. The Commission is merely to comply with the principle of natural justice, save and except the ones laid down under sub-section (4) of Section 13 of the 1986 Act. The proceeding before the National Commission are although judicial proceedings, but at the same time, it is not a civil court within the meaning of the provisions of the Code of Civil Procedure. It may have all the trappings of the Civil Court but yet it cannot be called a civil court”

 

In the case of New India Assurance Co Ltd versus Super Fashion in judgement dated 9^th March 2018 wherein Para 7 the Hon’ble National Commission said that “It needs little emphasis that if an Insured files objections to the report by the Surveyor, appointed by the Insurance Company to assess the loss, the Insurance Company is bound to apply its independent mind on such objections/material before rejecting the claim. A blind reliance on Surveyor’s report because it suits the interest of the Insurance Company, as in the present case, would be violative of the principles of natural justice.”

 

    In the present case, the Complainant company has not raised any objection to the report submitted by the Surveyor, the Surveyor not only submitted his report but has been examined from the side of Insurance Company has proved his report and photographs of burnt coil which were taken while was in transit to Bangalore for repair. The manner the Surveyor has given evidence inspired confidence. In the said report during the cross examination he has stated that “It is correct that I have no direct proof that the coil got damage due to electrical short circuit but the signs and situations marked by me as above and indicated in the report are enough to suggest that the coils were damaged due to electrical short circuit. My assessment on the loss is based on the documents and materials furnished by the Complainant.”

He has also stated that, he has inspected the damage coils which were lying in Beltola Guwahati for transportation to Bangalore for repair. He further stated that he took photographs of the coil and also visited Shillong and took photographs of the body of the transformer. In his deposition he had stated that “ I personally visited the site and inspected the damage transformer and found that the damage was caused due to electrical short circuit.”

 

In his cross examination he has said that there was no signs of fire if there is a fire there would have black sooth and burning of insulation on the machine. In the Standard Fire and Special Perils Policy wherein the general exclusion has been mentioned and it is relevant to quote Item No 7 where it has mentioned that “Loss destruction of damage to any electrical machine, apparatus, fixture or fitting arising from or occasioned by over running, excessive pressure, short circuiting, arcing, self heating or leakage of electricity from whatever cause ( lighting included ) provided that this exclusion shall apply only to the particular electrical machine, fixture or fitting so affected and not to other machines, apparatus, fixture or fittings which maybe destroyed or damaged by fire so setup.” 

         In the present case the complainant has brought documents to prove its case but has not brought any witness to prove those documents. whereas opposite party has brought surveyor as its witness who proved the report was cross examined .In such view of the matter documents attached to complaint petition cannot be a piece of evidence. On analysis of the materials brought from both sides, this Commission is of the view that the complaint has failed to make out the case of damage of the coil on account of burning due to fire on account at leakage of oil rather as the document of the complaint itself are contradicted to each other. In the earlier communication dated 17.12.2009 to the Insurance Company it has been stated the tap changer problem and the snap action switch was found to be defective, they had replaced the same after this also the transformer was not working. Kirloskar Engineers were suspecting that the main coils have burnt out. Later on they made out the case of such incident to bring the claim within the purview of the Insurance. The certificate given by one of the engineer Mr Balaji Gupta cannot be given reliance as he has not  been produced as witness to prove his certificate where story of incident of fire has been mentioned, as it does not raise confidence as  create a doubt about the genuineness of the contents of the document especially in view of fact that another engineer who was one of the member of the inspecting team did not put his signature on the said certificate in as much the minutes of meeting of same day does not disclosed such incident as well as no final report has been brought by the Complainant Company to substantiate its claim.

        In view of the above discussion and finding arrived at by this Commission the claimant cannot proved its case. All issued are decided against the claimant but in favour of opposite party. This claim application has no merit and the same is dismissed.