| ORDER | | BEFORE THE DISTIRCT CONSUMERS FORUM AT KHAMMAM Dated this, the 31st day of May, 2011. CORAM: 1. Sri Vijay Kumar, B.Com, L.L.B., President 2. Sri R. Kiran Kumar, B.Sc., L.L.B., Member C.C.No.74/2009 Between: M/s Mineral Exploration Corporation Ltd., Rep. by its Zonal Manager, V. Murugiah, Regional Maintenance Centre, Bandalaguda, Hyderabad. …. Complainant. And 1. United India Insurance Company Limited, Branch Office, 1-7-70, IIFloor, Madhu Complex, Trunk Road, Khammam – 507 003. 2. United India Insurance Company Limited, Divisional Office, H.No.9-1-1, I Floor, Opp. R.T.C. Busstand, Kothagudem – 507 101. …Opposite parties This C.C. is coming on before us for final hearing in the presence of Sri K.V. Krishna Rao, Advocate for complainant and of Sri. G.Sita Rama Rao, Advocate for opposite parties No.1 & 2; upon perusing the material papers on record; upon hearing the arguments and having stood over for consideration, this forum passed the following: ORDER (Per Sri Vijay Kumar, President) This Complaint is filed u/s.12-A of Consumer Protection Act, 1986. The averments made in the complaint are that the complainant is a Public Limited Company owned by Government of India and is engaged in Exploration of Mineral Resources apart from undertaking drivage of incline shaft sinking with exploration and borings of tube wells. The complainant submitted that the complainant company had undertaken a Kachinapally Project in Khammam District and for that complainant company had taken two standard fire and special perils policies dated 03.11.2003 and 26.05.2003 from the opposite party Insurance Company for the two rigs valued Rs.6,36,224/- and 7,31,429/- respectively. As per the two insurance policies, the period of insurance commenced from 03.11.2003 to 02.11.2004 and 28.05.2003 to 27.05.2004 respectively. As per the said polices if the property insured is destroyed or damaged, the Insurance Company agreed to pay to the complainant, the value of the property or the amount of such damage. And further submitted that on 21.03.2004 the extremists blasted the said two rigs, they were completely damaged beyond repairs and it was brought to the notice of the opposite party company by the complainant and the complainant company made a claim for the damage caused to the rigs. On that the opposite party insurance company deputed its Surveyor to MECL, Kachanapally project and Regional Maintenance Centre MECL, Hyderabad to survey the said two rigs and the surveyor assessed the liability at Rs.2,25,510/- for each rig, though each rig was costing above Rs.6,00,000/-. And also submitted that the complainant company to avoid further loss of time gave its approval for settlement of claim and conveyed the same to the surveyor as per the letter dated 07-10-2004, but the surveyor of opposite party without giving any notice unilaterally revised the liability to Rs.2,71,020/- in respective of both Rigs as against Rs.4,51,020/- as per the instructions of the opposite party Company. The same was not accepted by the complainant and it was conveyed to the Insurance Company through letter dated 23-11-2004. The Insurance Company through letter dated 08-12-2004 informed the complainant that the claim would be settled at Rs.1,35,497/- and Rs.1,32,930/- totaling to Rs.2,68,427/-. In response to the same, the complainant informed to the opposite party company through letter dated 11-12-2004 that the reduction of the amount out of the net liability assessed by the Surveyor and requested to settle the claim for Rs.4,51,020/-. In the meanwhile the opposite party Insurance Company addressed a letter dated 30-12-2004 alleging that the coverage of terrorism excess came into force w.e.f 01-04-2002 and the copy of the same has been supplied along with policies copies even though no such copy was furnished along with policies. And further submitted that opposite party Company failed and neglected to settle the claim of the complainant in terms of the standard fire and special perils policy obtained by the complainant as such there was a deficiency on the part of the opposite party Insurance Company in rendering service to the complainant, the complainant has no other alternative but to file the present complaint. And also submitted that the complainant Company suffered huge loss due to non-operation of the said two rigs by way of paying idle wages to the workmen/employees for two month and also incurred loss in maintaining the establishment. 2. On behalf of the complainant, the following documents were filed and marked as Exs.A.1 to A.10. Ex.A1 - Attested copy of Insurance Policy dated 03-11-2003. Ex.A2 - Attested copy of Insurance Policy dated 28-05-2003. Ex.A3 - Photocopy of fax Assessment of loss sent by Surveyor, dt.16-08-2004. Ex.A4- Letter from the complainant to Insurance Company Surveyor, dt.07-10-2004. Ex.A5 - Letter sent by Insurance Company Surveyor to the Complainant Company, dated 16-11-2004. Ex.A6 - Letter sent by complainant Company to Insurance Company Surveyor, dated 23-11-2004. Ex.A7 - Letter sent by Insurance Company, Khammam to the complainant, dt.08-12-2004. Ex.A8 - Letter sent by complainant to opposite party Insurance Company, Khammm, dt.11-12-2004. Ex.A9 - Letter sent by complainant to opposite party Insurance Company, dt.04-01-2005. Ex.A.10- Letter sent by opposite party Insurance Company to the complainant, dt.30-12-2004. 3. On receipt of notice, the opposite party No.1 and 2 appeared through their counsel and filed counter. 4. In the counter opposite party Company admitted the averments of the complainant. The opposite party denied the averments of the complainant with regard to the cost of the said rigs are Rs.6,36,224/- and Rs.7,31,429/-. The opposite party Company admitted the taking of two standard fire and special perils policies dated 03-11-2003 and 26-05-2003 and admitted that the extremists blasted the two rigs on 21-02-2004, the said two rigs were completely damaged beyond repairs and it was brought to the notice of the opposite party company by the complainant. And also in their counter submitted that the Surveyor of their company has originally assessed the loss to the both Rigs for Rs.4,51,020/- without the application of excess of Rs.1,00,000/-, when this fact was brought to the notice of the Surveyor, he revised the loss and assessed for Rs.2,71,020/-, the non-application of the terrorism excess was an omission on the part of the Surveyor, which was corrected in the revised assessment. And also submitted that the complainant stated that “they suffered huge monetary loss of Rs.19,85,008/- together with future interest @ 12% p.a. because of non-operation of the damaged Rigs, the consequent wages paid to the idle workmen/employees as per the standard fire and special perils policy specifically excludes any consequently losses” and as per their policy condition, the exclusion is reflected under (A) General Exclusions, condition No.9 of the said policy. And further submitted that the Forum is lacking in jurisdiction to entertain the complaint, as several complicated question of law and facts are involved. Hence the complaint is liable to be dismissed with exemplary costs. 5. On behalf of the opposite parties, the following documents were filed and marked as Exs.B.1 to B.2. Ex.B.1 - Certified policy, dated 03-11-2003. Ex.B.2 - Photocopy of the Surveyor Report, dt.14-08-2004. 6. The complainant as well as the opposite parties filed written arguments. 7. Upon perusing the material papers on record, now the points that arose for consideration are, 1) Whether the complainant company is entitled for the claim? 2) To what relief? Point No.1:- In this case as per the averments of the complainant, the complainant is a Public Limited Company, had undertaken for exploration of minerals at Kachinapally Project, Khammam District and for that complainant company had taken standard fire and special perils policies for two Rigs, valued Rs.6,36,224/- and 7,31,429/- respectively from the opposite party Insurance Company. On 21-03-2004, the extremists blasted the two rigs and they were completely damaged beyond repairs. The complainant company informed the same to the opposite party Insurance Company, on that Insurance Company deputed their surveyor to assess the liability. To avoid further loss of time the complainant company gave its approval for settlement of claim as per the terms of the Surveyor for Rs.4,51,020/- and conveyed the same to the opposite party company through their letter (Ex.A4), dated 07-10-2004. But the Surveyor of the opposite party Insurance company without giving notice, unilaterally revised the liability to Rs.2,71,020/- in respect of both rigs as against Rs.4,51,020/-. As the opposite party Insurance Company failed to settle the claim the complainant approached the Forum for redressal. From the documents on record, we observed that immediately after the incident the complainant company informed the same to the opposite parties. As per the surveyor report (Ex.B2), on 23-03-2004 spot survey was conducted and in his report observed that “skid base mounted drilling machine with Sl.No.253 was blasted by the extremists of the CPI MI PW group. The present replacement of the new machine works out to About Rs.21.00 Lakhs. Adequacy of sum insured Rs.6,36,224/-. The insured claim Rs.7,27,740.99p/- towards cost of replacement and also for repairs. After assessment of loss, net liability assessed for Rs.2,23,009.40p/- for MEC each Rig”. On that the complainant company conveyed their acceptance for settlement of insurance claim in respect of their rigs MEC-275 and MEC-253 at Rs.2,25,510/- each (total two rigs for Rs.4,51,020/-) leaving the wreck with their organization through letter (Ex.A4) dated 07-10-2004. But the surveyor of the insurance company in his letter dated 16-11-2004 informed that as per the instructions of the insurance company the policy excess deducted to Rs.1,00,000/- against Rs.10,000/- and revised the total liability for Rs.2,71,020/-. After receiving the letter (Ex.A5) dated 16-11-2004, the complainant company addressed another letter (Ex.A6), dated 23-11-2004 to the surveyor of the insurance company as the complainant company failed to understand how such drastic reduction was made when the assessment was made basing on the huge damage caused and loss incurred. In Surveyor’s report, he assessed the total loss for each rig as Rs.6,37,459.99/-. On that less depreciation @50%, i.e. Rs.3,18,730/-, less Salvage value Rs.20,000/-, less policy excess as 10,000/- in total net liability assessed as Rs.2,23,009.40p/-. From the record the rigs were insured for Rs.6,36,224/- each. As per the surveyor’s report we observed that the extremists blasted the drilling equipment and the same was completely damaged beyond repairs. The complainant Company conveyed their acceptance for the settlement of insurance claim in respect of two rigs MEC-275 and MEC-253 for Rs.4,51,020/- leaving the wreck with their organization. From the letter (Ex.A7), dated 08-12-2004 settlement of fire insurance claim, insurance company erroneously lessed the terrorism excess even after lessing the depreciation as 50%, insurance less 23% and deducted the salvage and total assessed on repairs and replacement basis. But as per the surveyor’s report the extremists completely damaged the two rigs beyond repair. In these circumstances, the Insurance Company is liable to pay Rs.4,51,020/- for two rigs as assessed by the company surveyor of opposite party No.1 and 2. As this point is answered accordingly in favour of the complainant. POINT NO.2:- In the result, the complaint is allowed in part, directing the opposite parties to pay an amount of Rs.2,25,510/- (Rupees Two Lakh Twenty Five Thousand Five Hundred and Ten only) each (Total two rigs for Rs.4,51,020/-) to the complainant with interest @9% p.a. from the date of damage (i.e. from 21-03-2004) till the date of realization and also awarded Rs.10,000/- towards costs. Dictated to the Steno, corrected and pronounced by us in the open forum on this 31st day of May, 2011. PRESIDENT MEMBER DISTRICT CONSUMERS FORUM,KHAMMAM. APPENDIX OF EVIDENCE Witnesses examined for complainant:- None Witnesses examined for opposite parties:- None Exhibits marked for complainant:- Ex.A.1 - Attested copy of Insurance Policy dated 03-11-2003. Ex.A.2 - Attested copy of Insurance Policy dated 28-05-2003. Ex.A.3 - Photocopy of fax Assessment of loss sent by Surveyor, dt.16-08-2004. Ex.A.4 - Letter from the complainant to Insurance Company Surveyor dt.07-10-2004. Ex.A.5 - Letter sent by Insurance Company Surveyor to the Complainant Company, dated 16-11-2004. Ex.A.6 - Letter sent by complainant Company to Insurance Company Surveyor, dt. 23-11-2004. Ex.A.7 - Letter sent by Insurance Company, Khammam to the complainant, dt. 08-12-2004. Ex.A.8 - Letter sent by complainant to opposite party Insurance Company, Khammm, dt.11-12-2004. Ex.A.9 - Letter sent by complainant to opposite party Insurance Company, dt.04-01-2005. Ex.A.10 - Letter sent by opposite party Insurance Company to the complainant, dt.30-12-2004 Exhibits marked for opposite parties:- Ex.B.1 - Certified policy, dated 03-11-2003. Ex.B.2 - Photocopy of the Surveyor Report, dt.14-08-2004 PRESIDENT MEMBER DISTRICT CONSUMERS FORUM, KHAMMAM | |
