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Judgment
THIS complaint has been filed by M/s. Ginvic Steels Pvt. Limited through its Director Mrs. Ravijit Kaur under the Consumer Protection Act, 1986 [for short hereinafter to be referred as the C.P. Act] against the opposite parties, New India Assurance Company Limited & others for directing them to pay the complainants a sum of Rs. 7,50,000/- along with interest @ 18% from the date of submission of the claim i.e. 1.4.1999 till the date of actual payment as well as Rs. 50,000/- towards financial and mental harassment caused to the complainants and grant any other relief(s) complainants may be found entitled in the facts and circumstances of the case. The complainant No. 1, M/s. Ginvic Steels is a Private Limited Company registered under the Companies Act and carrying on the work of manufacture of Forged Steel Round Bars, flats and squares at Village Madhopur, Barwala Road, Dera Bassi and having its Head Office at 59, Madhya Marg, Sector 26, Chandigarh. The complainant No. 2, Mrs. Ravijit Kaur is the Director of M/s. Ginvic Steels Pvt. Ltd., who is authorised to file the present complaint. It has been averred in the para 2 of the complaint that for the manufacture of the above mentioned items - One Tonne Clear Space Pneumatic Power Hammer along with its various parts including Anvil Block Fitted with Loose Steel Top, Pallet and Key were got insured by the complainants from the opposite parties, New India Assurance Company Limited, Bombay and its branches at Chandigarh from the period 29.1.1998 to 28.1.1999. A sum of Rs. 37,878/- was paid as premium vide Cheque No. 308189 dated 29.1.1998 drawn by the complainants on the State Bank of India, Industrial Estate Branch, Chandigarh. In respect of the said insurance, the opposite parties issued Insurance Policy No. 4435020038006 dated 29.1.1998 at Chandigarh. The machinery, as per the Schedule attached was insured for a sum of Rs. 42,92,000/-. The above insurance policy was renewed by the opposite parties for the period from 29.1.1999 to 28.1.2000 vide Renewal Policy No. 4435020039004 dated 29.1.1999 issued at Chandigarh on 29.1.1999. The machinery was insured for the sum of Rs. 42,92,000/- and a premium of Rs. 37,878/- was paid to the opposite parties vide Cheque No. 699238 dated 29.1.1999 of State Bank of India, Industrial Estate, Chandigarh. The details of the property insured were indicated in the attached Schedule which included the Anvil Block Fitted with Loose Steel Top, Pallet and Key Fitted at Serial 1(a) which was insured for a sum of Rs. 7,50,000/-.
IT has been averred in para 4 of the complaint that the Anvil Block of the complainants which was duly insured with the opposite parties got damaged beyond repair and accordingly the complainants vide their letter dated 1.4.1999 brought to the notice of the opposite parties that part of their one Tonne Clear Space Pneumatic Power Hammer named Anvil Block Fitted with Loose Steel Top, Pallet and Key mentioned at Serial No. 1(a) of the Schedule of machinery duly insured with the opposite parties had got damaged. The complainants further requested the opposite parties to depute their Surveyor to assess the damage at the earliest. In order to run the factory, the complainants had to purchase an Anvil Block for Rs. 8,11,200/- inclusive of Sales Tax. The opposite parties deputed a Surveyor to assess the damage. After the survey of the assessed damage, the opposite parties kept on verbally assuring the complainants that settlement of their claim is under active consideration of the opposite parties Company. The complainants submitted their claim bill for the same vide their letter No. GS/24/99-00/09 dated 24/27.5.1999 amounting to Rs. 8,93,216/-. However, on the settlement reached between the opposite parties and the complainants on 3.6.1999, it was agreed to accept a sum of Rs. 4,94,839/- after deducting the amount of salvage of Anvil Block subject to the terms and conditions and exception as per policy conditions towards cost of repairs and replacement charges in full and final settlement of the claim of the complainants in respect of the damage caused to the insured items, which occurred on 29.3.1999 at Dera Bassi in the premises of M/s. Ginvic Steels Pvt. Ltd. The complainants also agreed that they shall not submit any supplementary claim in respect of the said claim. The salvage cost thereof was also agreed to be deducted from the claim. In para 6 of the complaint, it has been alleged by the complainants that the opposite parties adopted an unethical, shifting and vacillating stand with the view to criminally misappropriate the amount due to the complainants. The complainants visited the office of the opposite parties on several occasions and also submitted reminders letter dated 9.8.1999, 14.8.1999, 23.8.1999, 16.9.1999 and 24.11.1999. However, despite the repeated reminders and requests there was complete inaction on the part of the opposite parties. However, in response to the letter dated 6.12.1999, the opposite parties informed the complainants that the Competent Authority have repudiated the claim of the complainants on the pretext that any loss of tup and anvil is not covered under the terms and conditions of the policy and that the claim was treated as ''No Claim''. In para 8 of the complaint, the complainants have clearly brought out that Anvil Block had been specifically insured for two consecutive years and the premium was also duly paid. Therefore, the intention of the opposite parties was to criminally misappropriate the amount due to the complainants. This is, they have alleged the violation of the contract of the insurance policy by which the said trust was to be discharged. The complainants had already given their letter of consent dated 3.6.1999 agreeing to accept a sum of Rs. 4,94,839/-. The relevant portion of the Consent Letter is reproduced as under : "Letter of Consent ............................................. We agree to accept the sums of Rs. 4,94,839.00 subject to terms and conditions and exceptions as per policy conditions towards the cost of the repairs and replacement parts in full and final settlement of my/our claim for loss which occurred on 26th March, 1999 at Dera Bassi in our premises as M/s. Ginvic Steels (P) Ltd. We also agree that we shall not submit any supplementary claim in respect of the said claim. The salvage cost thereof be deducted from our claim. This settlement is subject to the acceptance by the Company."
However, the said consent was withdrawn by the complainants in pursuance of their legal notice sent through their Counsel on 31.12.1999 and the complainants now claimed a total sum of Rs. 7,50,000/- as was insured by the opposite parties and for which actually damage of Rs. 8,93,216/- was sustained and in respect of which letter dated 24/27.5.1999 had already been submitted to the opposite parties. The complainants had also claimed interest at the market rate which is not less than 18% p.a. from the date of lodging the claim i.e. from 1.4.1999 to the date of actual payment. In para 12 of the complaint, it has been averred that in response to the legal notice dated 31.12.1999, the opposite parties submitted an evasive and vague reply dated 19.1.2000 to which a rejoinder was sent by the complainants vide rejoinder dated 12.2.2000 from their Counsel. In para 13 of the complaint, it has been averred that in view of the facts and circumstances the complainants are consumers and the opposite parties were liable to provide service by insuring the machinery parts of the complainants. However, the service provided by the opposite parties were perfunctory in nature. There has been a deficiency in service rendered by the opposite parties which makes the complainants liable to be paid the price for deficiency in the service and also the price of sum insured for the damaged part of the machinery i.e. Anvil Block Fitted with Loose Steel Top, Pallet and Key Fitted, which was specifically insured by the opposite parties and is indicated at Serial No. 1(a) of the Schedule to the insurance policy. The opposite parties are also liable to pay compensation to the complainants/consumers for loss and injury suffered by them due to the negligence of the opposite parties.
In para 15 of the complaint the complainants have prayed that the opposite parties be directed to pay to the complainants a sum of Rs. 7,50,000/- representing the sum insured along with interest at the rate of 18% p.a. from the date of submission of the claim i.e. 1.4.1999 till the date of actual payment as well as Rs. 50,000/- towards mental harassment caused to the complainants as also the expenses.
IN reply filed on behalf of the opposite party Nos. 1 to 5, the opposite parties have raised preliminary objections saying that the complaint is not maintainable inasmuch as the claim of the complainant was repudiated by the opposite parties vide registered letter dated 6.12.1999 after due application of mind. There is, therefore, no deficiency in rendering the services on the part of the opposite parties. IN another preliminary objection it has been alleged that the claim involves disputed questions of facts and as such this Commission has no jurisdiction to try the disputed and complicated matters in the summary jurisdiction. On merits, the contents of para 1 have been disputed. No resolution in favour of the complainant No. 2 has been placed on file enabling the complainant No. 2 to prefer the present complaint. Therefore, she is not legally authorised to prefer the present petition. Paras 2, 3 and 4 of the complaint have been disputed by the opposite parties. Para 5 of the reply has denied the contents of the para 5 of the complaint. The opposite parties have denied for want of knowledge that Anvil Block was purchased for Rs. 8,11,200/-. It is stated that the opposite parties deputed Surveyor and Assessors to assess the loss and the complainant gave his letter of consent dated 3.6.1999 to the Surveyors and agreed to accept a sum of Rs. 4,94,839/- of its full and final settlement of the claim. The consent letter was part of the Survey Report. Further, it has been vehemently denied that any settlement was reached between the opposite parties and the complainants on 3.7.1999. The opposite parties in para 6 of their reply have denied that they used any unethical and vacillating stand with a view to criminally misappropriate the amount due to the complainants. The allegations are vehemently denied, being incorrect. Para 7 of the complaint stands admitted by the opposite parties to the extent that the claim of the complainants was repudiated by the Company on 6.12.1999. It was stated by the Company that loss of tup and anvil was not covered under the terms and conditions of the policy and accordingly, the claim was repudiated. The repudiation was in accordance with the machinery break down policy (MBD Policy). The admissibility of the claim was examined at the Divisional Office, Regional Office level and thereafter at Head Office level. The Head Office of the opposite parties advised that the tup and anvil and the Pneumatic Power Hammer was not covered under the MBD Policy because as per the tariff, it was an exclusion. The opposite parties had examined in the claim in the light of MBD tariff and MBD Policy of the Company. Keeping in view the provisions of MBD tariff and MBD Policy, which are guiding factors for the settlement of the claims. Therefore, the claims submitted by the complainants have been repudiated. In para 8 of the reply, it has been averred that the Anvil Block cannot be insured independently and damage to Anvil and Tup is not covered under the terms and conditions of the policy. It has been denied that there was any intention of the opposite parties to criminally misappropriate the amount due to the complainants. It is also denied that opposite parties had dishonestly used the amount or there is any violation of law and express legal contract. It is, however, admitted that the complainants had given consent letter dated 3.6.1999 and agreed to accept a sum of Rs. 4,94,839/- to the Surveyors. (Emphasis supplied by us)
IN para 9 of the reply, it has been averred that the loss was only to the tune of Rs. 4,94,839/- regarding which consent was given by the complainants. The consent was subject to the acceptance of the claim under the terms and conditions of the MBD Policy. Rest of the allegations have been denied. This has also been denied that the complainants can claim a sum of Rs. 7,50,000/-. IN para 11 of the reply it has been alleged that the demand of Rs. 7,50,000/- by the complainants together with the interest @ 18% p.a. is illegal. The demand of Rs. 50,000/- towards financial and mental harassment caused to the complainant is also disputed and denied. There is no financial or mental harassment caused to the complainants by the opposite parties. It has also been denied in para 13 of the reply that the services provided by the opposite parties were perfunctory in nature. The complainants are not entitled to any amount. There is no deficiency in rendering the service. The damaged parts of the machinery were exclusions under the policy and the tariff and as such claim regarding their damage did not fall under the terms and conditions of the policy. There is no negligence on the part of the opposite parties. It has been further averred that the claim of the complainants has rightly been repudiated by the opposite parties. Hence, the complaint is not maintainable and the same may kindly be dismissed. We have heard the learned Counsel for the complainants, Mr. S.S. Katnoria, Advocate and Mr. Pradeep Bedi, Advocate appearing for the opposite parties. We have also perused the record of the case with utmost care and circumspection along with the various relevant documents adduced by the respective parties. We now proceed to examine the rival contentions of the parties. Learned Counsel for the complainants, Mr. S.S. Katnoria, Advocate contended that the Tup and Anvil was part of the insured Anvil Block Fitted with Loose Steel Top, Pallet and Key and the complainants had paid the premium for the insurance of these items continuously for two years. The damage to the Anvil Block Fitted with Loose Steel Top, Pallet and Key has been due to normal working in the premises of the Company. The claim of the complainants for Rs. 7,50,000/- with 18% and Rs. 50,000/- is legitimate. Mr. S.S. Katnoria, Advocate has also brought our attention to the cross-examination of Dr. R.K. Attri, Sr. Divisional Manager, New India Assurance Company Ltd., Divisional Office No. II, SCO 104-106, Sector 34-A, Chandigarh with respect to his affidavit dated 14.5.2001. Dr. R.K. Attri, in his cross-examination, inter alia, has contended as under : "Annexure C-3 Schedule forms part of the policy issued by the opposite party, New India Assurance Company Ltd. which I have perused today in the Commission. Though Annexure C-3 Schedule makes a mention of Anvil Block Fitted with Loose Steel Top Pallet and Key Fitted but as per the conditions and terms of the policy Hemmer is covered without Tup and Anvil. In the subsequent order also the same machinery as detailed in the Schedule Annexure C-3 was insured by the opposite party subject to the terms and conditions of the policy as aforesaid."
On the other hand, Mr. Pradeep Bedi, learned Counsel for the opposite parties confirmed that the complainants had given a consent letter to accept the loss to the tune of Rs. 4,94,839/-. He vehemently argued that the claim of the complainant has been rightly repudiated by the Head Office of the opposite parties. He further submitted that there is no deficiency in service on the part of the opposite parties and hence the complaint should be dismissed. Once it is admitted that the insurance covered Anvil Block Fitted with Loose Steel Top Pallet and Key Fitted and consent of complainant was asked for regarding valuation of the same by the Surveyor, the repudiation of claim of the complainant is neither justified in fact or in law and as such the claim was repudiated for no valid and legal reasons. Consequently, we find deficiency in service on the part of the opposite parties and allow the complaint and direct the opposite parties to pay Rs. 4,94,839/- with interest @ 9% from the date of consent letter i.e. 3.6.1999 till the date of actual payment. Copy of this judgment be supplied to the parties free of charges. Complaint allowed.