Branch Manager, National Insurance Co. Ltd. vs M.P.S. MODERN RICE MILL

THE complainant''s case is that the complainant has been carrying on business in the name and style of M.P.S. Modern Rice Mill. He has insured his rice mill with the 1st opposite party under fire policy ''C'' for a total sum of Rs. 22,00,000/-. On 18.8.1995 there was a fire accident which caused heavy damage. THE complainant after intimating the police made a claim to the opposite party. THE Surveyor appointed by the opposite party made a spot inspection, took photographs and noted down the damages. Stating that the boiler and its accessories fall within the scope of Exclusion as per standard policy ''C'', the 1st opposite party allowed a compensation of Rs. 70,755/- being the damages caused to the building. No compensation was awarded for the exploded domestic boiler or other machineries and fixtures. THE 1st opposite party stated that the boiler should have been insured under a separate Engineering policy. If the complainant had been informed about the same, he would not have opted for the policy under fire policy ''C'' but would have opted for other appropriate policy. THE complainant issued a notice through his lawyer calling upon the 1st opposite party to pay the damages caused to the domestic boiler and other fixtures in a sum of Rs. 4,00,000/-. THE 1st opposite party sent a reply containing false allegations. Hence the complaint.

THE opposite parties in their version contended as follows: THE complainant is not a consumer. It is no doubt true that the complainant has taken insurance policy with the 1st opposite party covering the period from 10.1.1995 to 9.1.1996 but the policy does not cover such as explosion of machine, steam generator or domestic boiler etc. THE complainant has to prove the factum of fire accident. It is false to say that the complainant had intimated the fire accident to police. THE copy of the complaint and the result of police investigation not furnished to the opposite parties. THE Surveyor appointed by the opposite parties assessed the damages in a sum of Rs. 70,600/- No doubt, the complainant has informed about the loss suffered to the boiler and its accessory but they fall within the scope of Exclusions as per standard policy ''C''. Only the loss suffered by the building is within the scope of admissible loss and, therefore, it was admitted in full as recommended by the Surveyor. No compensation can be granted to the exploded domestic boilder since such an explosion is excluded under Fire policy ''C'' and separate Engineering policy for boil explosion which ought to have been taken have not been taken by the complainant. Only subsequent the complainant has opted for both the policies namely fire policy ''C and Boiler and Pressure plant policy. To the notice issued by the complainant, the opposite party sent a suitable reply. THEre is no deficiency in service. THE alleged claim of Rs. 3,47,900/- is not tenable. Hence the opposite parties pray for dismissal of the complaint. The lower Forum accepted the complaint and directed the opposite parties to pay a sum of Rs. 3,47,900/- with interest at 18% p.a. from the date of accident till date of realization and a sum of Rs. 5,000/- as compensation and cost of Rs. 1,000/-. Hence the appeal.

The point for determination in this appeal falls within the narrow compass. Whether the explosion caused to the machinery namely the boiler and its accessories would be covered by the policy or not is the only point for determination. To appreciate the contention, we would refer to the policy. Ex. A 1 is the letter issued by the 1st opposite party to the complainant mentioning the details. It gives break-up figures of the value, the rate per 1000, the total premium payable for covering the risk. Ex. A2 is the fire policy ''C''. The policy clearly mentions as follows: "In consideration of the insured named in the Schedule hereto having paid to The NATIONAL INSURANCE COMPANY LIMITED (hereinafter called the company) the premium mentioned in the said schedule, The COMPANY AGREES, subject to the Conditions and Exclusions contained herein or endorsed or otherwise expressed hereon) that if after payment of premium the property insured described in the said schedule or any part of such property, be destroyed or damaged by: (1) Fire (2) Lightning (3) Explosion/implosion but excluding loss of or damage to boilers, (other than domestic boilers) economisers or other vessels, machinery or apparatus in which steam is generated or their contents resulting from their own explosion/implosion."

THUS, we find it covers explosion or implosion but excludes loss or damage to boilers, other than domestic boilers, economisers or other vessels, machinery or apparatus in which steam is generated or their contents resulting from their own explosion or implosion. THUS, we find that a reading of the relevant provision in the policy shows that the loss suffered here falls within the scope of "Exclusions" as per standard Policy ''C''. It is also stated by the opposite parties that no compensation could be given to the exploded domestic boiler since the explosion is excluded under Fire Policy ''C'' and there is a separate engineering policy for the boiler explosion which alone would cover such explosion. In fact, it is alleged by the opposite parties that subsequent to this instance while the complainant sought insurance, he not only opted for the fire policy ''C'' but also boiler and pressure plant policy to the boiler under the engineering policy. This is not disputed by the complainant. Therefore, it would follow that the complainant himself is aware of the fact that the fire policy ''C'' does not cover the explosion caused to the domestic boiler for Clause ''C'' clearly provides other than domestic boilers and what was damaged here is a domestic boiler is not disputed by the complainant. The word ''domestic" is defined in the "Oxford Dictionary" as relating to a home or family: for use in the home and kept by humans or existing or occurring within a country and not foreign. The complainant has not alleged that the policy in dispute here is not a domestic policy. In the schedule of properties mentioned that the cover is on the value of plant and machineries and furniture, fixtures and fittings whilst installed and other machineries related to the Modern Rice Mill kept in the building of I class construction situated at above address used and occupied as Rice mill. Ex. A9 is the document produced by the complainant. It is a certificate issued by M/s. Photons, who supplied the boiler. They have written as follows: "This is to certify that we have supplied and installed a Non-IBR Steam Generator to M/s. MPS MODERN RICE MILL, UTTUKULI vide our Invoice No. 136, dated 10.1.2004 the pressure of which cannot exceed 30 PSI since no stop valve for preventing outlet of steam was provided and also a relief, valve was provided, and for all practical purposes, this equipment may be called a domestic boiler."

Therefore, it is obvious from the very document produced by the complainant that what was installed was only the boiler which for all practical purposes is only a domestic boiler. If it is a domestic boiler then the exclusion clause would apply with the result that the cover cannot extend to the damage to the boiler. Hence it follows that the repudiation by the opposite parties on the ground that the boiler has been excluded and will not be covered by the fire policy issued namely ''C'' fire policy is a justified one and, therefore, in such circumstances we have to hold that there is no deficiency in service. In fact, the lower Forum has only held it a domestic boiler in the course of its order. The opposite party is not bound to reimburse the value of the accessories damaged in the explosion since the accessories are part and parcel of the boiler and, therefore, when there is a clause excluding the same from the purview of coverage, the accessories cannot be held to be not a part of the main item nor can be considered as a separate item for the purpose of insurance coverage. Therefore, in this view of the matter, we hold that the order passed by the lower Forum cannot be sustained and hence it deserves to be set aside. Consequently, the appeal has to be allowed setting aside the order passed by the lower Forum.

IN the result, this appeal is allowed but in the circumstances without cost. The order passed by the lower Forum is hereby set aside. The complaint will stand dismissed but in the circumstances without cost. Appeal allowed.