1.      Heard Mr. Pradeep Sharma, Advocate, for the complainant and Mr. Naveen Kumar, Advocate, for the opposite parties. 

2.      M/s. Regency Aqua-electro and Motel Resorts Ltd. (the complainant) has filed this complaint for directing United India Insurance Company Ltd. (the opposite parties) to pay (i) Rs.22,32,900/- under policy no.112101/11/09/11/00000204; (ii) Rs.53,93,107/- under insurance policy no.112100/11/10/07/00000047; (iii) interest @10% per annum on the above stated amounts since 26.04.2010 till the date of payment; (iv) Rs.5,00,000/- for financial loss, due to deprivation of above stated amounts; (v) Rs.1,25,000/- as litigation costs; and (vi) any other relief which may deem fit and proper in the circumstances of the case.   

3.      The facts as stated in the complaint are as follows:-

(a) The complainant was a company incorporated under Companies Act, 1956. The complainant started a hydroelectricity power project, named as “Hanumanganga Small Hydro Power Project” at Hanuman Chatti, district Uttarkashi, Uttarakhand, on the bank of Hanumanganga, a tributary of Yamuna River, at NH-123 (Dehradun to Yamunotri Road) around 175 Kms from Dehradun. Initially two Turbines (each of 1.5 MW electricity generation capacities) were commissioned in April, 2005. Later on 3^rd Turbine of 1.95 MW electricity generation capacity was commissioned in July 2008. Elevation of Power Project -2184 Mt, 14 Mt. high Surge Tank -2340 Mt. and D Silting Tank (Intake Water) -2355 Mt. Power Pipe Line is MS, running around 1038 Mt. from D-Tank to Surge Tank. One Penstock Pipe for Phase-I, two Turbines and one Penstock Pipe for Phase-II Turbine were installed. The project was running smoothly since 2005. Maintenance of plant, machineries and turbines used to be done on regular basis mainly during off season, which needs to be done due to collection of silt in D-tank. During 2008-09, the project generated 152,22,300 units electricity, earning revenue of Rs.41.23 million and in 2009-10, the project generated 171,30,000 units electricity, earning revenue of Rs.44.22 million. In April, 2010, the project generated 1287300 units electricity up to 26.04.2010.

 (b)    The complainant obtained Standard Fire and Special Peril Policy from United India Insurance Company Ltd. i.e. Policy bearing No.112101/11/09/11/00000204 (for short Policy No.204) effective from 07.01.2010 to 06.01.2011, for coverage of Rs.30.00 crores, (i.e. covering risk of entire building of Hydro Power Project, including all RCC, Brick Work, structures for Rs.19.00 crore and retaining walls, boundary walls pushtals, for Rs. one crore. The entire plant and machinery whilst fitted/or lying at the site, for Rs.10 crores). The policy also extended coverage of additional risk of removal of debris for Rs.20 lacs. The complainant paid a premium of Rs.200,400/- for this policy. The complainant obtained a second insurance policy i.e. Loss of Profit (Fire) Policy bearing No.112100/11/10/07/00000047 (for short Policy No.47) effective from 01.04.2010 to 31.03.2011 for a coverage of Rs.7.40 crores (including Rs.5 lacs auditors fee) in respect of consequential loss of profit of 4.95 MW project, The complainant paid a premium of Rs.81,622/- for this policy.

(c)   Sudden grid failure and the plant being synchronized with the grid tripped on its own was experienced on 26.04.2010 at 5.55 P.M., when the unit was generating 3MW on two units of 1.5 MW each. The monitoring staff of the plant noticed that there was no water movement inside the power pipe. In the meantime, watchman deployed at intake weir informed that the river side wall of D-silting tank had collapsed with a loud sound. As there was a sudden heavy discharge in water, the watchman instructed to close the gates of intake weir and to open the gate of river side to bye-pass the water flow. The senior staff then noticed severe damage to the D-tank. Due to sudden increase in discharge of water in the river, which caused flood/inundation in the area, soil under the D-slit tank washed away and the tank collapsed along the river side. The D-tank was approximately 5 Mts. above the river bed and the complainant had provided 3.8 Mts. extended raft of 3.8 Mts. wide on river side followed by stone masonry wall of 1.5 Mts. high and wire crates up to the base of D-tank. Due to incident of heavy discharge/inundation (i) river side wall was completely sheared off around 38 Mts length from the bottom tapper portion/hoper and crashed down on the river bed, (ii) transition channel wall around 2.0 Mts. on the river side tilted and cracked, (iii) 2# tie members out of 4#s in RCC between both side walls of the D-tank got snapped, (iv) extended raft 3.8 Mt wide on the river side was broken and cracked due to the impact of D-tank wall over it falling down in the river, (v) stone masonry wall of 0.55x1.5 Mt high provided alongside of the D-tank wall for support also collapsed and shaken badly due to impact transmitted on falling of wall over raft, (vi) GI wire Crete blocks provided along the river bed for protection up to the top, badly damaged partly collapsed and shaken badly due to impact transmitted on falling of wall over raft, (vii) sheet metal plates of 4mm thickness provided on top all along over the D tank wall snapped from belt mouth side & crashed along with the D-tank wall.

(d)  The complainant immediately informed to the Insurer about the incident and the damages caused to the Project. The complainant also lodged a report to Police Station Hanuman Chatti in respect of incident on 27.04.2010. The Insurer appointed M/s. Rakesh Kapoor & Co., NOIDA for survey of the incident and assess the loss. The experts of the Surveyor M/s. Rakesh Kapoor and Co. inspected the project on 28.04.2010, 29.04.2010, 30.4.2010, 18.06.2010, 29.7.2010 and 30.7.2010. The Surveyor as well as the insurer demanded the various papers from the complainant in respect of loss of the project, machinery and plant as well as loss of the income, which were supplied by the complainant to the Insurer/Surveyor. The Surveyor, after detailed survey, submitted his report dated 10.11.2010, in respect of the loss of the Project, covered under Policy No. 204, in which it has been found that due to excessive and sudden discharge of water in Hanumanganga, the Insured could not get a chance to open the gates of spill way channel at the intake side, to manage the heavy discharge resulting in damage. There was no breach of warrantee of the Policy and loss falls under the scope of the Policy. He assessed the net loss of the plant as Rs.22,32,900/-. The Surveyor submitted report dated 23.12.2011, in respect of the loss of the profit, covered under Policy No. 47, in which he has assessed loss of the profit to Rs.53,92,218/-. The surveyor also found the auditor’s fee was liable to be indemnified in the policy.

(e) The insurer also appointed Sharma & Associates, Investigator & Loss Assessor, on 10.01.2011, for investigation in respect of the cause of loss. Mr. Devinder Sharma, Investigator submitted his report dated 18.01.2011 stating that the present loss seemed to be a constructional damage or burst in the lake water stored by the complainant for the power project and not due to any peril. Some query was also made by the Insurer from the Investigator. Thereafter, the Investigator through letter dated 21.04.2011, informed that he had obtained a report of Meteorological Department Barkot Uttarkashi, showing that no rain was reported at Barkot and all other reporting stations of district Uttarkashi, on 25.04.2010 and 26.04.2010. Forecast issued on 25.04.2010 and 26.04.2010 showed mainly dry weather in Uttarakhand and no snow melt data record available to them. Along with the report dated 21.04.2011, he had also supplied a letter of Mr. Anand Kumar Sharma, Director, Meteorological Centre, Dehradun. Thereafter, the Insurer made certain queries from the Surveyor, which were replied through email dated 15.07.2011, in which the Surveyor has clearly mentioned that the stream of Hanumanganga passes through forest area from upper hills/mountains. It draws water either from rain or snowmelt. On 25.04.2010 and 26.04.2010, there was no rain in upper hills/mountains. Due to only reason of heavy snowmelt in upper hills on 26.04.2010, heavy water discharge was experienced suddenly. Intake gates used to be open/close manually. At the time of incident, intake gate was opened to allow the water into the system. Due to sudden high discharge, a flash flood developed in the tank and due to excessive pressure of water, RHS wall was sheared off. Thereafter, several meeting /correspondence were held between the Insured and the Insurer but no order was passed.

(f) As, no information regarding the decision taken by the Insurer was communicated to the complainant, the complainant filed Consumer Complaint No.95 of 2012 on 31.10.2012 before State Consumer Disputes Redressal Commission, Punjab, in which the Insurer appeared and raised the objection that complex question of facts are involved which cannot be determined by the Commission. The State Commission by order dated 07.08.2014 dismissed the consumer complaint on the observations that the complex questions of fact are involved in the complaint which cannot be determined by the Commission. The complainant challenged the order dated 07.08.2014 in First Appeal No.1003 of 2014. This Commission allowed the appeal by order dated 03.03.2016 and remanded the matter to the State Commission for deciding the consumer complaint on merit. In the meantime, in view of larger bench judgment of this Commission in Ambrish Kumar Shukla Vs. Ferrous Industries Pvt. Limited, 2017 (1) CPJ 1, it was realized that State Commission had no pecuniary jurisdiction as such the complainant sought withdrawal of the complaint from State Commission, which was allowed by State Commission by order dated 25.04.2017. After withdrawal, the present complaint was filed on 24.01.2018.

 (g) The complainant stated that on 26.04.2010 due to snowmelt in upper reaches, the water level in Hanumanganga River had got suddenly high and the river was flooded, which had damaged the plant. Flood and inundation peril was fully covered under the Policy No. 204. The project remained closed due to aforesaid reason from 26.04.2010 at 6.00 P.M. to 24.07.2010 till 9.00 P.M. i.e. for 88.62 days, which caused profit loss of Rs.127,95,461/- which is on the average of previous year revenue income. The loss was also covered in Policy No.47. The losses are liable to be reimbursed, but the insurer is not doing anything in the matter, therefore, there was deficiency in service on its part.

4.      The insurer had filed its written reply on 01.06.2018 and contested the matter. It has been stated in the written reply that from the report of Meteorological Department dated 21.04.2011, it was fully proved that in Uttarkashi the weather was dry on 25.04.2010 and 26.04.2010 and no data relating to snowmelt was recorded in Uttarakhand. India Meteorological Department was a Government Department and its report is reliable. The Surveyor relied upon the certificate given by Tehsildar Barkot, district Uttarkashi, which is procured evidence and no reliance could be placed on it. In view of the report of Meteorological Department as well as Investigator, the loss to the buildings, plant and machinery as well as loss to the profit was not covered in the Insurance policies as such it was not liable to be indemnified by the Insurer. Apart from it, preliminary objections have been raised i.e. that (i) cause of action arose on 26.04.2010, while the complaint was filed on 24.01.2018. It is long, barred by limitation and the delay is not liable to be condoned. (ii) The total valuation of the complaint was less than rupees one crore as such this Commission is lack of pecuniary jurisdiction. The complainant voluntarily got his complaint withdrawn from the State Commission, Punjab and cannot derive any benefit of his own act. (iii) The complaint was filed by Regency Aqua-electro and Motel Resorts Ltd., while resolution of Board of Directors of the meeting dated 15.12.2017 has been filed of Regency Aqua-electro and Motel Resorts Pvt. Ltd. as such complaint was not filed by an authorised person of the company. (iv) The complainant is engaged in commercial activities as such, is not a consumer. (v) The policies contained bank clause but the bank was not impleaded as the party in the complaint, and (vi) there were two policies and one complaint was not maintainable for the claims of the two policies.

5.      The complainant filed his rejoinder reply on 25.06.2018 in which the material facts contrary to the complaint have been denied. It has been stated that from the method for calculation of the valuation as provided in Ambrish Kumar Shukla Vs. Ferrous Industries Pvt. Limited 2017 (1) CPJ 1, the valuation of the complaint exceeds to Rs.one crore as such it was withdrawn from State Commission and filed before this Commission. The complaint was initially filed on 31.10.2012. Insurer has appointed Surveyor in the matter, who submitted his reports on 10.11.2010 and 23.12.2011 as such the complaint was well within time from the date of report of the Surveyor. In any case, the complainant has not been informed relating to repudiation of the claim as such the cause of action is continuing day by day. The complainant filed affidavit of evidence of Rakesh Aggarwal and documentary evidence i.e. the copies of policy No.204 and policy No.47 Annexure C-2 and Annexure C-3 and cover note of the policy Annexure C-4, Surveyor report dated 10.11.2010 Annexure C-5, Certificate of Tehsildar Annexure C-6, the Surveyor report dated 23.12.2011 Annexure C-7, consent letter dated 30.12.2011 Annexure C-8, emails dated 09.12.2010 Annexure C-9, email dated 15.12.2011 Annexure C-10, email dated 23.05.2012 Annexure C-11, emails dated 15.07.2011 Annexure C-12 to C-14, Order of State Commission dated 25.04.2017 Annexure C-15, Order of State Commission dated 07.08.2014 Annexure C-16 and Order National Commission dated 03.03.2016 as Annexure C-17.

6.      The Insurer filed Affidavit of Evidence of Gyan Prakash along with written reply. The surveyor report dated 10.11.2010, Investigator report dated 18.01.2011 and 21.04.2011, Certificate of Meteorological Department dated 21.04.2011 and certificate of Tehsildar Barkot, Uttarkashi, Uttarakhand. Both the parties have filed written arguments.

7.      I have considered the arguments of the counsel for the parties and examined the record. It has been argued that the complex question of facts is involved, which required for adducing oral evidence as such in the complaint cannot be decided by this Commission. The complainant be relegated to go to the civil court. The Consumer Protection Act, 1986 (hereinafter referred to as the Act) was enacted with object to provide for better protection of the interests of the consumers and for that purpose, consumer council and other authorities for settlement of consumer disputes have been established. Section 13 (4) confers same powers for trial of the dispute upon the authorities under the Act, which are vested in Civil Court under Code of Civil Procedure, 1908, while trying a suit in respect of (i) the summoning and enforcing the attendance of any defendant or witness and examining the witness on oath, (ii) the discovery and production of any document or other material object producible as evidence, (iii) the reception of evidence on affidavits, (iv) the requisitioning of the report of the concerned analysis or test the appropriate laboratory or from other relevant source, (v) issuing of any commission for the examination of any witness and (vi) any other matter which may be prescribed. Although under the Act, the jurisdiction of the authorities is limited to consumer complaint, but while deciding such complaint no limit has been fixed for adjudicatory power. The authorities are conferred jurisdiction to decide the issue of “unfair trade practice” which has been defined under Section 2 (r) of the Act. This definition is similar to the definition of “fraud” as given under Section 17 of Indian Contract Act, 1872. From these provisions it is clear that this Commission can hold a full trail as held by civil court or adopt summary procedure for decision of any complaint. In the present case, none of the parties has demanded for full trial as held by civil court and both the parties have adduced their oral evidence in the shape of affidavit and documentary evidence. None of them sought for cross examination of the deponents of the affidavit or for summoning of any other witness. A Bench of three Judges of Supreme Court in Dr. J.J. Merchant Vs. Shrinath Chaturvedi, (2002) 6 SCC 635, (paragraph-7) held that the object and purpose of the Act is to render simple, inexpensive and speedy remedy to the consumer with complaint against defective goods and deficient services, it being a benevolent piece of legislation, intended to protect a large body of consumer from exploitation. Consumer Forum is an alternate Forum, established under the Act, to discharge the function of Civil Court. The argument that the complicated question of fact cannot be decided by the Forum, has been specifically rejected (In paragraph-12). Similar view has been taken in Amar Jwala Paper Mills Vs. State Bank of India, (1998) 8 SCC 387, CCI Chambers Coop. Hsg. Society Ltd. Development Credit Bank Ltd. (2003) 7 SCC 233. This view has been reaffirmed by three Judges Bench of Supreme Court, in IFFCO TOKIYO General Insurance Company Ltd. Vs. Pearl Beverages Ltd., 2021 SCC OnLine SC 309. The Insurer earlier also raised this issue, which has not been accepted by this Commission in its judgment dated 03.03.2016, which has become final and is binding upon the Insurer.

8.      So far as the arguments that the complainant is not a consumer as he is engaged in commercial activities are concerned, Supreme Court in Leelavati Kirtilal Mehta Medical Trust Vs. Unique Shanti Developers, (2020) 2 SCC 265, has that if the person engaged in commercial activities has purchased the goods or availed the services for his own use, then he is consumer. In the present case, Insurance Services have been availed for personal use and not for earning any profit from it as such the complainant is a consumer. So far as the arguments that the complaint was not filed by an authorised person of the company is concerned, in Rejoinder Reply, it has been stated that due to typographical error, in the resolution of Board of Director of the complainant, “Private” word has been typed.            

9. So far as the question of limitation is concerned, the surveyor has submitted his report on 10.11.2010 and 23.12.2011 but the matter is still pending. Admittedly no repudiation order has been passed by the Insurer. The claim was filed before insurer on 27.04.2010. In the absence of any repudiation letter, cause of action is continuing day to day and the complaint cannot be said to be barred by limitation. Supreme Court in Transport Corporation of India Vs. Veljan Hydrair Ltd. (2007) 3 SCC 142, has held that in the absence of refusal to deliver the consignment, limitation for action would not start to run.

10.    Pecuniary jurisdiction of this Commission was Rs. one crore or above. Earlier, in some cases, it has been held that valuation of the claim in complaint is relevant for deciding the jurisdiction. However, in Ambrish Kumar Shukla Vs. Ferrous Industries Pvt. Limited 2017 (1) CPJ 1, it has been held that under Section 21 of the Act, value of the goods or service and compensation are relevant for deciding pecuniary jurisdiction. The value of Insurance Policy in the present case is more than Rs. one crore. In any case, the issue of pecuniary jurisdiction does not cause any obstacle for this Commission as it is well settled that a court of higher jurisdiction can always decide the cases relating to lesser valuation of its pecuniary jurisdiction as such there is no substance in this argument. So far as the arguments that there were two policies are concerned, the parties were same and the claim of second policy depends upon allowing the claim under first policy as such single complaint can be filed and the joinder of causes of action is permissible.

11.    The main dispute between the parties is as to whether the damage of the plant was caused due to “flood or inundation”, which is a peril specified under Clause-vi or due to “river erosion” as falling in exclusion clause (c) of Clause-viii of the Policy. According to the complainant, on 26.04.2010 at 5.55 P.M., plant was functioning. Intake gate of D-slit Tank was opened to allow the water intake into the system. Due to sudden high discharge, in the River Hanumanganga, a flash flood developed in the tank and which created excessive pressure of water in the tank, due to which RHS wall of D-slit tank was sheared off. Due to flood/inundation, the soil under the D-slit tank washed away and the tank collapsed along the river side. The damage was cause due to flood/ inundation in the River as in high hill area, there was sudden heavy snowmelt on that day. The Insurer does not deny collapsing of D-slit Tank of the project on 26.04.2010, however took plea that the constructional damage or burst in D-slit tank was caused due to river erosion, which was due to natural flow of the River and not due to flood.

12.    The Insurer appointed M/s. Rakesh Kapoor & Co., NOIDA for spot survey of the incident and assess the loss. The Surveyor inspected the project on 28.04.2010, 29.04.2010 and 30.04.2010. On 28.04.2010, they could very well verify as to whether there was any sign of flood in the River on 26.04.2010 or not. Tehsildar Barkot gave a certificate relating to sudden surge in the water level in Hanumanganga River on 26.04.2010, resulting the flood in the area of Hanuman Chatti. The report of the Surveyor dated 10.11.2010 is based upon personal inspection of the site on 28.04.2010 and also upon the certificate of Tehsildar Barkot. In email dated 15.07.2011, the Surveyor has again clarified that the stream of Hanumanganga passes through forest area from upper hills/mountains. It draws water either from rain or snowmelt. On 25.04.2010 and 26.04.2010, there was no rain in upper hills/mountains. Due to heavy snowmelt in upper hills on 26.04.2010, there was heavy discharge of water in the river. The very purpose of appointment of spot surveyor at the time of incident is that he can verify the cause of damage on the spot and test the version of the Insured in respect of the cause. There is no reason to disbelieve the Surveyor’s report. There is no reason to ignore the certificate of Tehsildar Barkot, in this case, who was a local officer. This Commission, in First Appeal No. 320 of 1994 Oriental Insurance Company Ltd. Vs. M/s. Mayur Restaurant and Bar, (decided on 18.08.1998) and First Appeal No. 782 of 2007, Oriental Insurance Company Ltd. Vs. R.P. Bricks, (decided on 15.05.2013) has relied upon the certificate of the revenue officer, in respect of flood.

13.    The Insurer is relying upon the report of Investigator. The Insurer appointed Sharma & Associates, Investigator & Loss Assessor, on 10.01.2011, for investigation in respect of the cause of loss. Mr. Devinder Sharma, Investigator, did not have the opportunity to personally verify the flood at that time. Mr. Devinder Sharma, Investigator submitted his report dated 18.01.2011 stating that the present loss seemed to be a constructional damage or burst in the lake water stored by the complainant for the power project and not due to any peril. When some query was made by the Insurer from the Investigator, then, he, through letter dated 21.04.2011, informed that he had obtained a report of Meteorological Department Barkot Uttarkashi, showing that no rain was reported at Barkot and all other reporting stations of district Uttarkashi, on 25.04.2010 and 26.04.2010. Forecast issued on these dates showed mainly dry weather in Uttarakhand and no snowmelt data record available to them. Along with the report dated 21.04.2011, he had supplied a letter of Mr. Anand Kumar Sharma, Director, Meteorological Centre, Dehradun. His report that he had verified from Meteorological Department Barkot Uttarkashi, is false, inasmuch as there was no reporting centre of Meteorological Department at Barkot. Dehradun situate at a distance of 175 KM away from Hanuman Chatti. In case, it did not have any data relating to snowmelt in Hanumanganga which is a local river, then it was not unnatural. This Commission, in First Appeal No. 268 of 2006 Bajaj Allianz General Insurance Company Ltd. Vs. Atibir Industries Company Ltd. (decided on 17.10.2011) has not relied upon the report of Meteorological Department as its office was located at a distance of 130 KM away from the place of incident. In such circumstance, the Investigator report is not liable to be relied upon.

14.    The complainant has stated that the project remained closed due to aforesaid reason from 26.04.2010 at 6.00 P.M. to 24.07.2010 till 9.00 P.M. i.e. for 88.62 days, which caused profit loss of Rs.127,95,461/- which is on the average of previous year revenue income. The loss was also covered in Policy No.47. The Surveyor in his report dated 23.12.2011 assessed the loss of profit to Rs. 53,92,418/-. The losses are liable to be reimbursed, but the insurer is not doing anything in the matter, therefore, there was deficiency in service on its part.

15.    Under Regulation-9 of Insurance Regulatory and Development Authority (Protection of Policy Holders Interest) Regulation, 2002, the Insurer is liable to pay interest at the market rate after expiry of six months of the loss.

16.    So far as the argument that the insurance policy contained bank clause and the concerned bank was not impleaded as party in the complaint as such there was defect of non-joinder of necessary party is concerned, the bank clause is relevant only when there is a dues of the bank then while paying the claim, the dues of the bank has to be satisfied first.  This complaint has been filed on the allegation that there is a deficiency in service on the part of Insurer in not paying the claim.  For deciding this issue, the bank is neither necessary party, nor proper party in the complaint.  If the payment of claim is required to be made then there is nothing obstacle for the Insurer to satisfy the dues of the bank first, even if the order is made for making payment of the claim to the complainant by this Commission as such there is no defect of non-joinder of necessary party.

O R D E R

In the result, the complaint succeeds and is allowed with cost of Rs.2 lakhs. The opposite parties are directed to pay Rs.22,32,900/- under Policy no.112101/11/09/11/00000204 and Rs.53,93,107/- under Policy no.112100/11/10/07/00000047 with interest @ 9% per annum since 26.10.2010 till the date of payment, within two months from today to the complainant.