AI Structured Summary
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Judgment
The complainant/respondent obtained an insurance policy in respect of a transformer installed in its rice mills. The said transformer had been manufactured by Rajasthan Transformer & Electric Corporation and was insured for a sum of Rs.5,53,000/-. The said transformer got burnt due to short-circuiting, on 12.1.2012. A claim was lodged by the respondent/complainant with the petitioner company and one Mr. Sanjeev Saxena was appointed as a surveyor to assess the loss to the complainant. The transformer was already 19 years old at the time it got burnt, it having been manufactured in the year 1993. Initially the surveyor assessed the loss before deduction of excess amount, at Rs.2,02,900/- but later on, he corrected the aforesaid amount to Rs.1,12,840/-. The higher amount had been given on account of a clerical error while calculating the depreciation amount. When right depreciation amount for 19 years was deducted, the resultant amount came to Rs.1,12,840/-. The insurer, however, did not make any payment to the complainant and took the stand that as per the insurance policy the excess amount itself was Rs.1,10,600/- which was liable to be deducted from the assessment made by the surveyor. Being aggrieved, the complainant/respondent approached the concerned District Forum by way of a consumer complaint.
The complaint was resisted by the insurer primarily on the ground that the loss to the complainant had rightly been computed by the surveyor and the excess amount of Rs.1,10,600/- was required to be deducted from the assessment made by the surveyor.
The District Forum vide its order dated 5.12.2012 directed the insurer to pay the entire sum insured to the complainant. Being aggrieved from the order passed by the District Forum, the insurer approached the concerned State Commission by way of an appeal. The said appeal having been dismissed by the State Commission vide impugned order dated 5.12.2015, the insurer is before this Commission by way of this revision petition.
The first question which arises for consideration is as to whether the assessment made by the surveyor was correct or the complainant was entitled to the entire sum for which the transformer was got insured by it.
Admittedly, the transformer which got burnt on account of short-circuiting was 19 years old transformer. The insurance policy taken by the complainant was a reimbursement policy and not a reinstatement policy. Therefore, the complainant was entitled only to the depreciated value of the transformer and the surveyor had rightly deducted the depreciation amount while assessing the loss to the complainant. Therefore, in my opinion, the surveyor had rightly assessed the loss to the complainant at Rs.1,12,840/-.
The next question which arises for consideration is as to what amount has to be deducted towards excess amount payable by the complainant from the amount assessed by the surveyor. The insurance policy to the extent, it is relevant reads as under:-
" INVENTORY OF THE PROPERTY INSURED
Sr.No. Qty. Risk Code Description & Details of items Maker''s Make Stand by Manf. Yr. Sum Insured (In Rs.) No. Premium (In Rs.) Excess (in Rs.)
1 1 1101018 Testing Transformers Rajasthan Transformer & Electric Corporation M/s Savitri Rice Mill
1993 5530001 0091911 5,082,621 1,10,600
Air Freight : Rs.00
Express Freight Rs.00 ACD Cover : Rs.00
Third party : Rs.00
Surrounding property Rs.00 Vst. Frn.Exot : Rs.00
EXCESS FOR For Each machine. Excess is 1% of Sum Insured Subject to a Minimum of Rs.2,500/-"
Referring to the figure of Rs.1,10,600/- given under the heading ''excess'' in the above-referred table, it is contended by the learned counsel for the petitioner that a specific sum having been recorded as the excess amount, the said amount must necessarily be deducted from the loss assessed by the surveyor. I, however, find myself unable to accept the contention. If the said contention is accepted, the footnote stipulating that the excess would be 1% of the sum insured subject to a minimum of Rs.2,500/- becomes redundant. The insurance policy cannot be read in such a manner as would render the footnote redundant. The word testing transformer has been used while describing the insured property. Though its quantity has been given as one, it appears to me that the excess amount of Rs.1,10,600/- was stipulated on the assumption that more than one machines were being insured though in fact it was only one machine, i.e., testing transformer which the petitioner company had insured. Had there been more than one machines, the excess amount would have been 1% of the sum insured subject to a minimum of Rs.2,500/- for each machine. Since in this case only there was one machine, the excess amount will have to be 1% of the sum insured, i.e., 1% of Rs.5,53,000/- which comes to Rs.5,530/-. The aforesaid interpretation would also be inconsonance with clause 1 under the heading ''Special Exclusions'' which provides that the excess as stated in the schedule to be first borne but the insured out of each and every claim where more than one item is lost or damaged in one and the same occurrence, but the insured shall not however be called upon to bear more than the highest excess applicable to any one such item. In any case, if there is an ambiguity or contradiction in the insurance policy, the benefit thereof will go to the insured.
The learned counsel for the complainant has drawn my attention to clause 2(b) of the insurance policy and submitted that in view of the aforesaid clause, the complainant is entitled to the entire sum for which the transformer was insured. I however, find no merit in this contention. The clause relied upon by the learned counsel, reads as under:- "In cases where an insured item is destroyed the Company will pay the actual value of the item immediately before the occurrence of the loss including costs for ordinary freight erection and customs duties if any provided such expenses have been included in the sum insured such actual value to be calculated by deducting proper depreciation from the replacement value of the item. The Company will also pay any normal charges for the dismantling of the machinery destroyed but the salvage will be taken into account."
It would thus be seen that depreciation has to be deducted from the replacement cost of the transfer. The survey report show that the replacement cost of the transfer was Rs.5,92,907/-. Since there was sum under insurance, on account of the sum insurer being Rs.5,30,000/- the resultant amount came to Rs.5,53,000/-. The depreciation amounted to Rs.3,00,200/- was deducted by the surveyor from the aforesaid amount and the balance amount came to Rs.2,52,800/-. The value of the salvage was assessed by the surveyor at Rs.1,39,960/-. After deducting the salvage value, the balance amount payable to the complainant was assessed by the surveyor at Rs.1,12,840/-
I, therefore, hold that only a sum of Rs.5,530/- is liable to be deducted from the quantum of loss assessed by the surveyor. After making the said deduction, the balance amount payable to the complainant comes to Rs.1,07,310/-. The petitioner should pay that amount to the complainant along with appropriate interest. It is directed that the insurer shall also pay interest @ 9% per annum on the aforesaid amount from the date of filing of the complaint i.e. 26.6.2012 from the date of the loss. The payment in terms of this order shall be made within four weeks from today. The revision petition stands disposed of.