BEFORE THE DISTRICT CONSUMER DISPUTES

REDRESSAL COMMISSION, JALANDHAR.

Complaint No.281 of 2020

      Date of Instt. 09.09.2020

      Date of Decision: 17.11.2023

M/s Shri Guru Har Rai Ji Cold Storage, VPO Talhi Sahib, Kartarpur, Jalandhar, Punjab through its Partner Sh. Jagroop Singh.

..........Complainant

Versus

1.       United India Insurance Company Limited, Sayal House, Lajpat          Nagar Market, Jalandhar, Punjab through its Branch Manager.

2.       United India Insurance Company Limited, Regd. & Head        Office:24, Whites Road, Chennai-600014 through its Principal         Officer/MD/CEO.

….….. Opposite Parties

Complaint Under the Consumer Protection Act.

Before:        Dr. Harveen Bhardwaj             (President)

                   Smt. Jyotsna                            (Member)

                   Sh. Jaswant Singh Dhillon       (Member)   

Present:       Sh. Arvind Sharda, Adv. Counsel for the Complainant.

                   Sh. R. K. Sharma, Adv. Counsel for OPs.

Order

Jaswant Singh Dhillon (Member)

1.                The instant complaint has been filed by the complainant, wherein it is alleged that the complainant is aggrieved by the repudiation of liability under the insurance cover provided to the complainant by the OPs under a subsisting policy of insurance. The complainant is engaged in cold storage business of potatoes for the last many years. The OPs are engaged in rendering general insurance services to the consumers. The complainant procured a Standard Fire and Special Perils Policy bearing no.2013001118P109617933 dated 27-10-2018 from the OP No.1 in respect to the aforementioned cold store. As per the terms of the said policy, the sum of 50,00,000/- was covered towards earthquake and a sum of Rs.50,00,000/- was towards STFI cover. The period of the cover was from 27-10-2018 to 26-10-2019. The opposite parties received a amount of Rs.46020/- dated 22-10-2018 towards the premium for giving the said insurance cover to the complainant. The said insurance contract dated 27-10-2018 the description of the property was- "On all kinds of plant and machinery used in cold store with all fitment/attachment accessories lying or fitted at above address". Moreover, the damage by lightening to electricity transformer installed by the complainant firm falls under purview of the insurance cover provided to the complainant firm. On 16-08-2019, the electricity transformer belonging to the complainant firm was damaged due to lightening associated with heavy rains. The matter was reported to the OP No.1 on the same day. Apart from that, the incident was reported to the concerned office of Punjab State Power Corporation Limited at Kartarpur, which is the servicing office of the complainant. The said office issued a certificate acknowledging the receipt of said information. Moreover, the matter was reported to police station Kartarpur who recorded the complaint under General Diary bearing no.32 dated 26-08-2019. On 22-12-2019, the complainant was flabbergasted to receive a letter from the OPs under which it was mentioned that as per the survey report claim does not fall under the preview of fire policy but it is MBD policy. Infact the loss occurred to the complainant firm due to lightening is validly covered under the aforementioned insurance policy. The OPs refused to entertain the claim of the complainant firm even before giving any opportunity to the complainant firm to file claim form along with necessary papers. Later on, the complainant got the damaged transformer repaired from A Star Power & Switchgear, Plot No.34, Opp. Satyam Market, Bulandpur Road, Godaipur, Focal Point, Jalandhar by making the entire payment. The said firm carried the necessary repairs upon the said transformer and charged a sum of Rs.1,28,726/- from the complainant. This act of OPs of repudiating the genuine and lawful claim of the complainant amounts to deficiency in services on the part of OPs and as such necessity arose to file the present complaint with the prayer that the complaint of the complainant may be accepted and OPs be directed to admit the claim of the complainant and pay a sum of Rs.1,28,726/- towards the loss occurred to the complainant along with interest @ 15% per annum from the date of loss till its realization. Further, OPs be directed to pay a sum of Rs.33,000/- to the complainant for causing mental tension and harassment and Rs.22,000/- towards legal expenses.

2.                Notice of the complaint was given to the OPs, who filed reply and contested the complaint by taking preliminary objections that the complaint is not maintainable against the OPs, as such the same is liable to be dismissed. It is further averred that on intimation of loss to the electricity Transformer allegedly due to lightning, the OPs deputed a Government approved Surveyor and Loss Assessor M/S Engineer's Enterprise to conduct the survey and assess the loss. The said Surveyor and Loss Assessor, visited the spot, conducted the Survey and submitted its Survey Report dated 26-10-2019 with OP No.1 assessing the Loss to the tune of Rs.20,150/- only with the observation that the Transformer was inspected in the presence of insured. There were no sign of flames or burning on transformer due lightning but it got breakdown due to internal short circuiting. Transformer was shifted to M/S A-Star Power & Switchgear, Jalandhar for repairs. The Surveyor & Loss Assessor visited the repairer's premises and inspected the transformer after dismantling, took the photographs and assessed the loss for the purpose of records only as there is no liability of the insurance company as the loss would had been covered under the Machinery Break Down policy which the insured has not taken. It is pertinent to mention here that loss due to short circuiting fall under the General Exclusions of the insurance policy i.e. under clause No. 7 of General Exclusions. Had there been any liability under the Standard Fire and Special Peril policy, it would had been limited to Rs.20,150/- as assessed by the Surveyor and Loss Assessor. As the claim was not payable under the Standard Fire and Special Peril Policy, the same was repudiated vide letter dated 09-12-2019 and complainant was informed accordingly. It is further averred that there is neither any deficiency in service nor negligence nor any unfair trade practice. Repudiating the claim which is not payable as per terms and conditions of the policy or is not covered under the policy does not amount to any deficiency in service nor negligence nor any unfair trade practice. The claim of the claimant has been efficiently handled and dealt with as per terms and conditions of the insurance policy and stands repudiated vide letter dated 09-12-2010. On merits, the factum with regard to taking a Standard Fire and Special Perils Policy from the OPs. It is also admitted that on 16.08.2019, the electricity transformer belonging to the complainant firm was damaged due to lightening associated with heavy rains and the facts regarding repudiating of the claim is also admitted, but the other allegations as made in the complaint are categorically denied and lastly submitted that the complaint of the complainant is without merits, the same may be dismissed.

3.                Rejoinder to the written statement filed by the complainant, whereby reasserted the entire facts as narrated in the complaint and denied the allegations raised in the written statement. 

4.                In order to prove their respective versions, both the parties have produced on the file their respective evidence.

5.                We have heard the learned counsel for the respective parties and have also gone through the case file as well as written arguments submitted by counsel for both the parties very minutely.

6.                The complainant purchased a Standard Fire and Special Perils Policy bearing no.2013001118P109617933 dated 27.10.2018 and sum of Rs.50,00,000/- was covered towards earthquake and a sum of Rs.50,00,000/- was towards STFI cover. This period was from 27.10.2018 to 26.10.2019 and complainant paid premium of Rs.46,020/- on 22.10.2018. Copy of the insurance policy has been proved as Ex.C-4.

7.                In the insurance cover, the description of the risk and the property has been given. The risk included plant and machinery and the property involved was on all kinds of plant and machinery used in cold store with all fitment/attachment accessories lying or fitted at address M/s Shri Guru Har Rai Ji Cold Storage, VPO Talhi Sahib, Kartarpur, Jalandhar. Moreover, the damage by lightening to electricity transformer installed by the complainant firm was also included.

8.                On 16.08.2019, the electricity transformer belonging to the complainant firm was damaged due to lightening associated with heavy rains. Same day, the matter was reported to the OP as Ex.C-5 and to PSPCL, who issued certificate as Ex.C-6 and also matter was reported to Police and GD entry has been proved as per Ex.C-7.

9.                The OP rejected the claim on the ground that as per the Survey report, claim does not fall under the preview of fire policy, but it is MBD policy. Copy of repudiation letter has been proved as Ex.C8, but as per complainant version, the damage was due to lightening and it is validly covered under the policy, but without giving any opportunity of hearing to the complainant, the claim was rejected. Later on, the complainant got the damaged transformer repaired from A Star Power & Switchgear, Plot No.34, Opp. Satyam Market, Bulandpur Road, Gadaipur, Focal Point, Jalandhar and complainant paid Rs.1,28,726/- Ex.C-9 and bill Ex.C-10.

10.              Whereas the OP stated that on intimation of loss to the electricity Transformer allegedly due to lightning, the OPs deputed a Government approved Surveyor and Loss Assessor M/S Engineer's Enterprise to conduct the survey and assess the loss. The said Surveyor and Loss Assessor, visited the spot, conducted the Survey and submitted its Survey Report dated 26-10-2019 with OP No.1 assessing the Loss to the tune of Rs.20,150/- only with the observation that the Transformer was inspected in the presence of insured. There were no sign of flames or burning on transformer due to lightning but it got breakdown due to internal short circuiting. Transformer was shifted to M/s A-Star Power & Switchgear, Jalandhar for repairs. The Surveyor & Loss Assessor visited the repairer's premises and inspected the transformer after dismantling, took the photographs and assessed the loss for the purpose of records only as there is no liability of the insurance company as the loss would had been covered under the Machinery Break Down policy which the insured has not taken. The OPs alleged that loss was due to short circuiting and falls under the General Exclusions of the insurance policy i.e. under clause No.7 of General Exclusions. Had there been any liability under the Standard Fire and Special Peril policy, it would had been limited to Rs.20,150/- as assessed by the Surveyor and Loss Assessor. As the claim was not payable under the Standard Fire and Special Peril Policy, the same was repudiated vide letter dated 09-12-2019 vide Ex.C-8 and complainant was informed accordingly.

11.              There is a condition in Ex.C-4 which provides the condition showing that the policy is subject to clauses i.e. Agreed Bank Clause and Reinstatement Value Policies. The complainant has relied upon the law of Hon’ble Madras High Court in a case titled as ‘HDFC ERGO General Insurance Co. Ltd. Vs. M/s Rohini Movie Park Rukmini’, decided on 10.03.2020. The case titled as ‘United India Insurance Company Vs. Milap Telecom’ 2012 (2) CLT 690, decided by Hon’ble NCDRC, in which it has been held that ‘Contention of insurer that the Telecom Department had obtained only fire policy and had not taken "Electronic Equipment Policy for the break down" which could have covered the loss on account of alleged short circuit cannot be accepted Proposal form clearly showing that furniture, fixtures and fittings including plant, machinery and accessories were included when underwriter desired issuance of policy cover Surveyor of OPs assured that the claim will be honoured in due course - Nothing to show that an additional premium was required to be paid for coverage of perils caused due to short-circuiting Alleged exclusion clause was not the part of fire Insurance policy - Technical plea raised by the insurer only avoid its legal liability Insurer held liable to pay for the loss assessed by the surveyor Impugned order held to be proper and sustained - Appeal dismissed with costs at Rs.5,000/-. Even similar judgment given by the Hon’ble NCDRC, in a case titled as ‘United India Insurance Vs. M/s Modi Korean Telecom’ in Appeal No.792 of 2007 decided on 14.03.2016, which also supports this version as there was proviso that ‘the exemption provided does not apply to other machines, fixtures or portions of electric installations, which may be destroyed or damaged by fire so set. In the present case also, in Ex.C-4 also there is an exemption i.e. it does not apply to other machines, apparatus, fixture or fittings which may be destroyed or damaged by fire so set up. Perusal of certificate of SDO PSPCL, Kartarpur shows that the transformer was burnt due to lightening with the result, the fault occurred in 11 kv RE field. The OPs have alleged that it was not due to lightening but due to short circuit. No certificate of expert electrician or of any PSPCL official has been filed to show that it was due to short circuit. The Surveyor is not expert electrician as no document of his expert as electrician has been filed on record by OP, whereas Ex.C-6 is the certificate of the expert electrician.

12.              As the OP has taken a plea of Clause-7 of General Exclusion Clause in policy, but this exclusion shall apply only to the particular electrical machines, apparatus, fixture or fitting so affected and not to other machines, apparatus, fixture or fittings which may be destroyed or damaged by fire so set up. Whereas OP failed to clarify which are those particular electrical machines etc. OP also alleged that if at all, it is due to fire then only this repair will be of Rs.20126, is not tenable as there is bill of Rs.128726/- showing repair of transformer which was given by ‘A’ Star Power & Switchgear regarding the damage occurred on 16.08.2019.

13.              In view of the above detailed discussion, the complaint of the complainant is partly allowed and OPs are directed to pay a sum of Rs.1,28,726/- towards the loss occurred to the complainant alongwith interest @ 6% per annum from the date of loss till its realization. Further, OPs are directed to pay a compensation of Rs.10,000/- for causing mental tension and harassment to the complainant and Rs.5000/- as litigation expenses. The entire compliance be made within 45 days from the date of receipt of the copy of order. This complaint could not be decided within stipulated time frame due to rush of work.

14.              Copies of the order be supplied to the parties free of cost, as per Rules. File be indexed and consigned to the record room.

Dated          Jaswant Singh Dhillon    Jyotsna               Dr. Harveen Bhardwaj     

17.11.2023         Member                          Member           President