KAMAL ELECTRODES COMPANY vs National Insurance Co. Ltd

THE present complaint is against the opposite party alleging the deficiency in the service of settlement of Insurance claim. Shortly stated the facts are complainant is a manufacturer of Welding Electrodes, situated in M.I.D.C. area of Amravati. THE complainant alleged that he had insured his manufacturing unit under the Insurance Policy, having ''A'' Coverage for the period of 14.12.1987 to 13.12.1988, for Rs. 2,00,000/-. According to complainant, the Divisional Manager of the opposite party issued a Cover Note under ''A'' Coverage Fire Policy, which includes the loss due to the storms. THE complainant alleged that the said policy was directly sent to the complainants Banker and he was given the aforesaid Cover Note, dated 14.12.1987 only. THE complainant further alleged that; on 22 5.1988, due to storm, the complainant sustained the loss of Rs. 71,000/as the roof of the Factory shed was blown off causing extensive damage. On the next day, the complainant informed the opposite party at Amravati and submitted his claim. THE opposite party did not pay any attention to settle the complainant''s claim. Hence, he sent a reminder on 31.11.1988. Subsequent reminders were sent on 6.12.1988 and 12.5.1989, after waiting for a considerable period. Finally, the complainant served a legal notice, dated 24.10.1989, on the opposite party for his claim. Ultimately, the opposite party informed the complainant that he was granted ''C Coverage Policy, which did not include the claim on account of storm and, therefore, rejected the complainant''s claim outright. THE complainant, therefore, claimed that there has been serious deficiency in the service of the opposite parties on two grounds. Firstly, there was inordinate delay in settling the claim and secondly his lawful claim has been rejected on erroneous grounds. Complainant, therefore, claimed Rs. 2,01,000/as compensation on various grounds. THE opposite party filed its written version belatedly in September 1991, and not within 30 day; from the receipt of the notice u/Sec. 13 of the Consumer Protection Act, 1986. THE opposite party admitted. that the complainant is a manufacturing concern under Small Scale Industry and that he suffered a loss to his factory due to the storm. THE only defence of the opposite party to reject the claim of complainant is that the complainant was issued Fire Policy under Category ''C'', which do not include the loss due to storm. It is also stated that cover note wrongly mentioned Fire Policy ''A''. It is further submitted that it is a mistake made by the Development Officer of the Insurance Company. It is further submitted that after realising the mistake, the complainant''s Policy was changed from Coverage ''A'' to Coverage ''C''.

WE have heard Shri Kalantri, Advocate for the complainant and Shri Mundada, Advocate, along with Shri Deshpande, Development Officer for the opposite party. WE have also perused all the relevant documents and the pleading of both the parties. The following issues arise for our consideration:- (1) Whether the complainant was granted Fire Policy with ''A'' Coverage.? (2) Whether there is deficiency in the service of the Opposite Party ? (3) Whether the deficiency is as a result of negligence in the service of the Opposite Party accrueing entitlement to the complainant to claim compensation?

The complainant has placed on record the Cover Note, dated 14-12-1987, in which it is clearly Written that the complainant''s unit was insured as per Fire Policy with ''A'' Coverage. The Cover Note is signed by a responsible officer, the Divisional Manager, Amravati, for the National Insurance Company Ltd. The Insurance Policy was never supplied to the complainant, but is alleged to have been sent directly to the complainant''s Bank. The Opposite Party placed on record a certified copy of the Insurance Policy in favour of the complainant showing ''C'' Fire Policy. Certified copy is dated 27-91991, signed by the Divisional Manager. The complainant has filed his affidavit in support of his allegations, in which he asserted that he was given ''A'' Fire Policy. The real controversy is whether the original Policy sent to Bank was having ''A'' Coverage or ''C'' Coverage? No attempt was made by Opposite Party to produce the original Policy from bank. No original Policy was ever shown to this Commission; showing ''C'' Coverage. The Surveyor''s report, dated 25-81990, on which heavy reliance is placed by the Opposite Party, also do not mention anywhere that the Surveyor had seen the Original Policy having ''C'' Coverage in his report. The allegations of the complainant that the Policy issued by the complainant was never given to him, but was directly sent to the Banker is not controverted by the Opposite Party. No notice was given to the Banker to produce the original Policy in question. The Opposite Party placed on record allegedly a certified copy of the original Policy, issued under the signature of the Divisional Manager, dated 27-9-1991. There is affidavit of Shri Kharche, Divisional Manager of the National Insurance Company at Jabalpur. In that affidavit, Shri Kharche had stated that he had issued ''C'' Coverage Policy and not ''A'' Coverage Policy to the complainant. The affidavit, which is dated 20-05-1992, is signed by Shri Kharche at Jabalpur. In his affidavit, nowhere it is stated that he has verified personally original Policy in question from the Banker of the complainant. He has stated from his memory, as he was at Amravati. The Opposite Party also has net placed on record the corrected Insurance Policy from ''A'' to ''C'' Coverage. Had it been a fact, the correction should have been found in the certified copy, dated 27-9-1991, placed on record. It is the case of Opposite Party that they subsequently they realised their mistake of issuing ''A'' Policy and had subsequently corrected it from ''A'' to ''C''. No such correction is reflected in the certified copy. We have, therefore, grave doubt that the certified copy, dated 27-9-1991, placed on record by the Opposite Party is not a genuine document, but a fabricated one to suit their defence. We are surprised to find that no efforts were made by the Opposite Party to show to us the corrected Insurance Policy from the Bank showing ''C'' Coverage after changing it from ''A'' Coverage. We are therefore, to discard the affidavit of Shri S.T. Kharche and the defence of the Opposite Party, as no convincing evidence has been placed before us. We are further surprised that, when ''A'' Coverage was issued to the complainant on 1412-1987, duly signed by the Divisional Manager why complainant was not informed to pay additional or appropriate premium in respect of ''C Policy. We further find that when the Policy of complainant was changed from ''A'' Coverage to ''C Coverage? the factum of change was never informed to the complainant till he filed the complaint. We are, therefore, satisfied from the discussion made above that the complainant was issued ''A'' Coverage and not ''C Coverage, as claimed by the Opposite Party. The alleged change is an after-thought to suit the defence by Opposite Party.

That takes us to the next issue whether there was deficiency in the service of the Opposite Party? The deficiency is apparent. The Opposite Party issued the document viz. Cover Note, dated 14.12.1987, in favour of the complainant showing ''A'' Coverage, which was signed by responsible officer like Divisional Manager. The complainant was, therefore, made to believe that he was insured for ''A'' Coverage. The second deficiency is that the Insurance Policy was directly sent to the Bank of the complainant and complainant had no opportunity to verify the fact whether he was issued ''C'' Coverage Policy or ''A'' Coverage Policy. Thirdly, the alleged correction was made in the original Policy without intimating the change to complainant and without his concurrence. Fourthly, the corrected copy of the Insurance Policy was not supplied to the complainant till the filing of this complaint. Fifthly, despite the repeated complaints, no claim of the complainant was settled for a considerable time and lastly, the Opposite Party went to the extent of fabricating false documents to reject the claim of the complainant. In our view, it is clearly an act of deficiency in the service of Opposite Party.

IN our view, the aforesaid deficiencies are serious. It is the mis-management in the office of the Opposite Party which is responsible for the mess, which caused loss to the complainant. We further find that the officers of the Opposite Parties were negligent in their working, which has come out with defence that they have committed mistake. The loss of the complainant has been assessed by the Surveyor for Rs. 24,650/-. There is no reason to reject that assessment and, therefore, we accept that assessment for the loss caused to the complainant due to storm, which is covered by ''A'' Policy. The complainant has already paid the premium for ''A'' Coverage and, therefore, the claim requires to be settled on the basis of ''A'' Coverage. Hence, we pass the following order : ORDER

THE opposite party is directed to settle the complainant''s claim at Rs. 24,550/and make the payment to the complainant within 30 days from the receipt of the order, together with interest as compensation at the rate of 18% p.a. from the date of this complaint till realisation. THE complainant also be paid Rs. 1,000/as costs. A copy of this order be sent to the Chairman of the National Insurance Company Ltd., at Calcutta/at 3, Middle Town Street, Calcutta-700701. Complaint allowed with costs.