M/S. Prem Processor Proprietor Birendra Omprakash Agarwal vs ORIENTAL INSURANCE COMPANY LTD

THE present revision petition has been filed against the order dated 07.12.2011 passed by the Gujarat State Consumer Disputes Redressal Commission, Ahmedabad in First Appeal no. 189 of 2009.

THE facts of the case as per the petitioner/ complainant are that the petitioner as per the title cause is running a business for self -employment. To indemnify against any loss, they have taken an insurance policy in respect of Machinery Breakdown from the respondent insurance company for the period 20.01.2002 to 19.12.2003 and paid a premium of Rs. 14,149/ - .

DURING the validity of the policy, on 07.07.2003, accidentally, there was damage in the Diesel Engine. The respondent was informed by letter dated 10.07.2003. They were also informed that the loss may be Rs. 2,00,000/ - which may increase or decrease after dismantling the engine. After the receipt of the said intimation the insurance company deputed M/s A M Patel Surveyor ''s Private Ltd., who visited on 11.07.2003 and on the same day requested the petitioner in writing to dismantle the D G Set in the presence of the repairer. As per the advice of the attending surveyor petitioner informed the repairer M/s Shreeji Spares and Service. Thereafter by letter dated 16.07.2003 send the details of the report which included the cost of repair and replacement of parts. Thereafter, the petitioner made further correspondence with the insurance company by letter dated 21.08.2003 and informed the insurance company that as per the instructions of the surveyor they had repaired the D G Set and kept it ready for verification of the damaged parts. After hearing from the insurance company they wouldl start the engine of the D G Set and also registered the claim with supporting bills.

THE fuel feed damaged parts had been repaired and the engine started. The repair and replacement cost is Rs.1,45,000/ - and they expected another supplementary bill of about Rs. 1,45,000/ -. Surprisingly, by letter dated 11.09.2003 the respondent informed the petitioner that the claim was not payable under the terms and conditions of the Machine Breakdown Policy.

HENCE the petitioner prayed: (a) The Forum should direct insurance company to make the compensation to the petitioner towards the claim lodged by making the payment of Rs.2,07,724/ - along with 18% interest from 01.09.2003 till realization.

(b) Special compensation of ?5,000/ - to be awarded towards mental agony and hardship and the same to be paid by the insurance company to the petitioner;

(c) Cost of the complaint of ?6,000/ - be awarded to the petitioner from the insurance company; and

(d)Any other relief this Forum deem fit may pass the same.

THE respondent/ opposite party - insurance company in their reply before the District Consumer Disputes Redressal Forum, Ahmedabad City at Ahmedabad ( ''the District Forum '') stated that the true facts of the case are that, after verifying the relevant papers and particulars, the insurance company wrote to the petitioner vide letter dated 31.03.2004 repudiating the claim.

THE letter reads as follows: "By Regd AD.

Dated 31/03/2004

M/s Prem Processors

272 Pirana Road

Saijpur Gopalpur (Piplaj)

O/s Narol Sarkhej Road

Ahmedabad - 382 405

Without prejudice

Dear Sirs,

Re: CI No. 144/ 2004/ 07 Pol. No. 44/2003/13 - Machinery Breakdown

With reference to the above, we regret to inform you that we are unable to accept our liability against your claim due to the following reasons:

(i) The damages to the Fuel Pump, Injectors and Turbocharger was due to wear and tear.

(ii) Surveyor did not find any accidental and/ or unforeseen breakdown of the said parts and / or other parts of the Diesel engine.

(iii) The cause of damages does not fall within the scope of machinery breakdown policy

(iv) There is no any accidental and/ or unforeseen breakdown to the turbo charger but due to wear and tear process resulted from its normal charges.

(v) Surveyor has also discussed the same subject matter with Mr Basant Agarwal and informed the non -admissibility of such damages under the M B Policy during their various visits dated 11/07/2003, 12/07/2003, 10/09/2003 and 07/12/2003.

(vi) The claim is not admissible under the terms, conditions, exclusions, provisions and endorsements of M B Policy of the insurance as the claim were found only due to wear and tear process resulted from its normal usages and the replacement/ repairs of such claimed parts were found required under routine/ preventive maintenance to keep the machine in efficient working condition and/ or for safe engineering practice.

(vii) Surveyor has also discussed with your service engineer Mr J G Raval of M/s Shreeji Spares and Service and also inform that fuel pump and injection nozzle required caliberation and no damage and no damages are found. The same is confirmed by your engineer.

(viii) As per your letter dated 08.09.2003 addressed to us, that is after two months as informed by you there was problem in turbocharger and immediate visit was done by our surveyor and found that before inspection the parts were dismantle and on minute inspection it found that it is due to wear and tear and it has nothing to do with previous claim.

Sorry for inconvenience caused to you.

Thanking you,

Yours faithfully,

Sd/ -

Sr Divisional Manager"

THE District Consumer Disputes Redressal Forum, Ahmedabad City ( ''the District Forum ''), while dismissing the complaint vide its order dated 23.01.2009 has observed as follows: "It is undisputed fact that, the complainant had taken the machinery breakdown policy. As per the conditions and provisions of the said policy, if machinery break down due to accident and if the damages caused then only the insurance company has the liability to pay the compensation, therefore, the complainant had to prove that accident happened in his factory on 07.07.2003 and for that, he had not submitted any kind of evidence. The liability to prove that what accident was happened, which kind of accident happened and what were the damages caused due to it, rested on the complainant. The complainant had not produced any such evidences. As per our humble opinion if the accident happened to the factory of the complainant than the intimation thereof might have been given to the police station, the panchanama of accident would have been carried out, the complainant had not produced any such evidence. Therefore, as the complainant had stated in the complaint that the accident was happened on date 07.07.2003 but no evidence for such accident had been produced by him before the opponent ''s surveyor or before us. The opponent ''s surveyor had personally visited the factory of the complainant. In presence of the complainant, examined the machinery. No such evidence had been produced before the opponent ''s surveyor regarding the accident. Therefore, as per our humble opinion, the detailed report which had been produced by the opponent ''s surveyor A M Patel, no such evidence challenging the said report had been produced by the complainant. The accident happened in the factory of the complainant, the liability to prove the same rested on the complainant. The complainant had not produced any evidence with regard to the accident. Therefore, the detailed report which had been produced by the opponent ''s surveyor, according to it the damages which had been caused to the diesel engine of the factory of the complainant, that only caused due to depreciation means due to wear and tear process, therefore, as per our humble opinion the depreciation caused to the machinery in normal courts, according to it depreciation was caused to the diesel engine set of the complainant and if the damages happened due to it than the complainant is not entitled for the compensation as per the conditions and provisions of the insurance policy. Therefore, as per our humble opinion as per machinery policy conditions and provisions if the accident happened to his factory than he will have to prove it. If the damages caused to the diesel engine due to an accident than the evidence thereof has to be submitted. The complainant had not produced any such evidence or proof, therefore, we resolved that, the detailed report and opinion of the opponent ''s surveyor, the complainant is not entitled to get the insurance amount in any manner as per the conditions and provisions of the machinery breakdown policy. Therefore, we resolve that, if the opponent insurance company had rejected the claim of the complainant than as per the conditions and provisions of the insurance policy it is proper and justifiable. As per humble opinion, the opponent insurance company had not shown any negligence by rejecting the insurance claim, nor kept any deficiency in service. Therefore, we resolved that the complainant totally failed to prove the complaint against the opponent, therefore, we resolved that the complaint of the complainant is required to be rejected. Due to our aforesaid decision, the complaint totally fails to prove the complaint and allegations against the opponent therefore, the complaint is hereby rejected and the final order passed as under: The complaint of the complainant is hereby rejected".

AGGRIEVED by the order of the District Forum the petitioner filed an appeal before the State Commission. The State Commission in its order dated 07.12.2011 also dismissed the appeal and stated that: "We are not in agreement with the statement of the appellant and we are in agreement with the conclusion of the learned forum. The appellant had not proved by documentary evidence or in any other manner that the accident was happened. The appellant had not challenged the report of surveyor by other documentary evidence or the report of other surveyor. While studying the produced papers it appears that, the accident was not caused in the machinery but due to depreciation the machinery got damaged, if the accident caused in machinery as per wear and tear then only the claim is available under the policy condition. In the case on hand, the appellant was not able to prove the accident by proper evidences. The surveyor had made detailed discussion of the points in the report, therefore, there is no reason not to believe the report. As per the laid down principles of law there is no reason not to believe the report of the surveyor. At the end of the above discussion, we don ''t want to interfere in the order of District Forum and in agreement with the conclusion of the District Forum. The insurance company had properly rejected the claim of the appellant therefore, we resolve that not made the deficiency in service, therefore, the following order is hereby passed. Appeal no. 189 of 2009 is hereby rejected. The order passed on 23.01.2009 in complaint no. 463 of 2005 by Consumer Dispute Redressal Forum, Ahmedabad City is passed properly".

WE have heard the learned counsel for the parties and have carefully gone through the records of the case.

LEARNED counsel for the petitioner have stated that they are giving up their claim for the replacement of turbo charger and are restricting their claim of ?70,000/ - for the calibration and servicing of the injector and for the fuel pump. Learned counsel for the petitioner has argued that the respondents were aware that the engine was of 1998 model when they gave the insurance policy. She, however, could not or give any evidence to support that the unforeseen and sudden physical damage was caused due to an accident leading to the breakdown of the said diesel engine.

LEARNED counsel for the respondent drew our attention to the general exceptions clause giving the Machinery Breakdown Insurance Policy. Clause 5 of the said policy reads as under: "Deterioration of or wearing away or wearing out any part of any machine caused by or naturally resulting from normal use or exposure".

HE then drew our attention to the survey report of M/s A M Patel Surveyors Private Limited. He drew our attention to point 3.1.5 and 3.2 which reads as under: "3.1.5. Later on after two months, the insured again also informed for the problem in the turbocharger vide their letter dated 08.09.2003. We immediately visited at insured ''s site dated 10.09.2003 for verification of the said problem to the turbocharger but we found the turbocharger in dismantled condition. Minutely inspecting the same, the damages to the turbocharger were found due to wear and tear process resulted from its normal usage and also not related to their previous claim. The same was also discussed with insured ''s representative Mr Naineshbhai and Mr Basantbhai Agarwal and we had handed over our letter confirming the same in writing.

3.2.Extent and nature of Damages. We found the damages as under:

S. No. Description of damaged Part Quantity Nature of Damages

3.2.1 Fuel Pump 1 no. Wear and tear resulted due to its normal usage

3.2.2 Injectors 6 nos. Wear and tear resulted due to its normal usage

3.2.3 Turbocharger 1 no. Wear and tear process resulted due to its normal usage

HE , thereafter, drew our attention to clause 3.3 - cause of damages which reads as under: "3.3.1 The above parts listed in S no. 3.2 of this report were found damaged due to only wear and tear process resulted from its normal usage.

3.3.2. We did not find any accidental and/ or unforeseen breakdown of the said parts and / or other parts of the Diesel Engine during our visits.

3.3.3. Hence, cause or damages do not fall within the scope of M B Policy.

3.3.4. As informed by insured ''s repairer, the proper diesel supply was not adequately reached from fuel pump, and/ or from Nozzles to the Engine and hence engine could not be started. The calibration and/ or cleaning of these parts were only required for the same problem. We are of the same opinion as concluded by the repairer".

THEREAFTER , the learned counsel for the respondent drew our attention to the details of survey report more particularly clauses 5.2 and 5.3 which reads as under: "5.2 We again visited at insured '' site on dated 12.07.2003 and repairer Mr Rawal of M/s Shreeji Sales and Services checked up the said Diesel Engine in our presence. The repairer also confirmed that there are no other damages to the captioned Engine but only the calibration/ servicing is required to the injectors and fuel pump. Hence, the repairer dismantled the injector and fuel pump in our presence and also did not find any accidental and/ or unforeseen breakdown inside the same. The copy of the repairer ''s letter dated 12.07.2003 confirming the same is attached herewith as an Annexure E. On the same day, we also discussed with Mr Basant Agarwal regarding the status of their claim and informed that such type of repairs does not fall within the scope of the M B Policy but it is insured ''s obligation to maintain their machine in efficient working condition. We had also requested insured to inform us only to verify reinstatement of the Diesel Engine as the said Engine is under insurance claim.

5.3 Later on insured informed to their insurers vide their letter dated 08.09.2003 that the said Diesel Engine is started after repairing the Fuel feed system. At the same time after about 2 months the insured stated in the same letter that there is also a problem in turbocharger. Hence, we immediately visited at insured ''s site on 10.09.2003 and noticed the turbocharger in dismantled condition. Thus, the insured did not arrange for our verification of the working problem of the turbocharger. Minutely notifying the same we concluded that there is no any accidental and/ or unforeseen breakdown to the turbocharger but observed said damages due to wear and tear process resulted from its normal usage".

FROM the above, we are clear that the damage to the diesel engine was not due to the incident of accident which resulted in sudden breakdown of engine due to wear and tear of the parts but due to its excessive use over the years. As per the survey report, the repairer has also confirmed that there was no other damage to the engine but only servicing is required to the engine and the fuel pump.

SERVICING and calibration cannot by any stretch of imagination be taken as a breakdown due to an incident of unforeseen circumstances or accident.

THE State Commission has given a well -reasoned order and we find no reason to disagree with the same.

THE Hon ''ble Supreme Court in Mrs Rubi (Chandra) Dutta vs M/s United India Insurance Co. Ltd., 2011 (3) Scale 654 has observed: "Also, it is to be noted that the revisional powers of the National Commission are derived from Section 21 (b) of the Act, under which the said power can be exercised only if there is some prima facie jurisdictional error appearing in the impugned order, and only then, may the same be set aside. In our considered opinion there was no jurisdictional error or miscarriage of justice, which could have warranted the National Commission to have taken a different view than what was taken by the two Forums. The decision of the National Commission rests not on the basis of some legal principle that was ignored by the Courts below, but on a different (and in our opinion, an erroneous) interpretation of the same set of facts. This is not the manner in which revisional powers should be invoked. In this view of the matter, we are of the considered opinion that the jurisdiction conferred on the National Commission under Section 21 (b) of the Act has been transgressed. It was not a case where such a view could have been taken by setting aside the concurrent findings of two fora."

THUS , no jurisdictional or legal error has been shown to us to call for interference in the exercise of powers under Section 21 (b) of Act. The order of the State Commission does not call for any interference nor does it suffer from any infirmity or erroneous exercise of jurisdiction or material irregularity. Thus, the present revision petition is hereby, dismissed with no order as to cost.