Nav Bharat Construction Company vs ORIENT INSURANCE CO. LTD.

NAV Bharat Construction Company, Jaipur Road, Madanganj-Kishangarh (complainant) has filed this complaint under Section 12 read with Section 17(a)(i) of the Consumer Protection Act, 1986 ("the Act") against M/s Orient Insurance Co. Ltd. on 30.3.1990 praying that a sum of Rs. 1,34,606.80 may be awarded to it together with interest @ 18% per annum from 18.3.90 to the date of payment. The complainant has stated that it got its Tata Hiatachi Excavator insured with the opposite party (insurer) vide policy No. 87/00163 cover note No. 197 886 for a period of one year from April, 87 to April, 88. The Excavator met with an accident and its bucket was hit and broken on 3.1.1988. It lodged a claim in time with the insurer. The machine was surveyed and after that the complainant incurred an expenditure as detailed in para 4 of the complaint amounting to Rs. 93,791. To this amount depreciation @ 10% Rs. 9,054 was deducted. It is stated that the claim was not settled by the insurer inspite of various letters and after a lapse of one year the opposite party refused to entertain the claim saying that the damage was caused due to regular use and not on account of any accident. The complainant has submitted copy of the letter marked as Annexure 4.

THE complainant made representations to the Divisional Manager and Chairman, Insurance Company as according to it the decision was unreasonable. THE head office of the Insurance Company wrote to the complainant on 25.8.89 that the matter was being taken up with the concerned office and the complainant will soon hear in the matter. THE complainant again wrote letters to the Insurance Company but nothing was heard from it. THE opposite party by its letter dated 21.2.90 repudiated the claim of the complainant. That letter has been submitted with the complaint and marked as Annexure 5. According to the complainant its claim has been rejected arbitrarily, capriciously and illegally. In support of that he was stated that it is abundantly proved by the photographs, initial survey reports and eye witnesses and expert''s opinion. Special damages to the extent of Rs. 20,000/- were claimed by the complainant an account of the blockade of the money for a long time and mental torture. It, therefore, filed the complaint as stated above for Rs. 1,34,606.80 together with interest. THE details of the amount are given in para 10 of the complaint. In support of the complaint Mr. Mool Chand Luhadia, partner of the complainant filed his affidavit dated 19.3.90. Photostat copies of the documents marked as Annexure 1 to 5 were submitted. Besides this, letter dated 4.1.1989 from the Divisional Manager was also submitted.

The opposite party (insurer) opposed the claim denying the liability to pay any amount to the complainant-insured. It was stated that the damage to the hoe-bucket has been found to have happened due to regular use of bucket lug, which was broken earlier due to overloading and breakage of tooth of the said bucket and not because of the accident. In para 5 amongst others it was stated as under : - "5- That in reply to para 5 of the complaint, it is submitted that the claim was thoroughly scrutinised and examined by the non-applicant and on the basis of Expert''s opinion, it was found that the alleged loss and damage was caused not because of the accident but due to other reasons like normal wear and tear etc. which do not fall within the scope of the Policy. The non-applicant made his stand very clear to the complainant vide its letter dated 4th January, 1989, which has been marked as Annexure. 4 by the applicant himself."

IT was also stated that the opposite party (insurer) got the claim of the complainant thoroughly examined and obtained expert''s opinion and on the basis of the same came to the conclusion that the alleged loss was not due to any accident and does not fall within the claim of policy and the same was repudiated. Reference was also made to the technical opinion of the surveyor and getting the matter thoroughly examined and on that basis it was opined that the alleged loss was not due to accident but for other reasons. The claim for compensation made by the complainant in para 10 of the complaint was denied. Certain additional pleas were taken which are contained in paras 5 and 12 to 18 of the version of the case. The sum and the substance of the additional pleas is that the claim as lodged due to accident is incorrect and so it was not covered by the policy. IT was submitted that there was no fault, imperfection, shortcoming or any inadequacy in quality, nature and manner of performance of the services provided by the insurer to the insured. In support of the version of the case, affidavit of Mr. Vinod Kumar Verma, Surveyor and Loss Assessor and photostat copies of the policy, survey report of Mr. Vinod Kumar Verma and report of the surveyor dated 7.12.1988 Interocean Surveyors Pvt. Ltd. were submitted. Mr. Mool Chand''s (partner of the firm) affidavit was submitted on 16.7.90. Besides this, affidavits of Sarvshri Anil Kumar Godha, Atul Kumar Luhadia, Anil Kumar Luhadia and Wagji were also submitted on 17.9.90.

IT appears from the office report dated 15.11.90 that affidavit of Tara Chand Sharma, technical opinion of the Manufacturers M/s Tata Engineering and Locomotive Co. Ltd., New Delhi No. TPH/196/335 dated 12th Oct. 1990, leaflet published by TELCO containing technical data of Tata Hitachi Excavator and copy of the letter of Insurance Co. dated 1.8.1988 demanding money receipt for finalisation of claim were filed on 25.10.90. We heard Mr. Mool Chand, Partner of the firm and Mr. Jatan Chand Jain, Advocate for the opposite party. In the first instance learned Counsel for the opposite party has raised two preliminary objections : - 1. that the opposite party (insurer) has thoroughly scrutinised and examined the claim of the complainant and thereafter rejected it. After rejection of the claim by the opposite party, a complaint under the Consumer Protection Act, 1986 is not maintainable. 2. that having regard to the nature of the claim and the documents submitted by the parties complicated issues of fact are involved which need elaborate enquiry and voluminous evidence and the State Commission should not exercise its power of investigating the complaint and deciding it. Sub-section 2 of Section (13) of the Act does not contemplate the determination of complicated issues requiring voluminous evidence and detailed scrutiny and assessment of such evidence, such questions contended the learned counsel, for the opposite party cannot be determined in a summary enquiry and, therefore, the complainant should approach a Civil Court We propose to examine both the contentions ad seriatum :

Re.l. The complainant has submitted letter dated 4.1.1989 (annexure 4) addressed to the complainant. It was sent by the Divisional Manager of the Insurance Company. It will be useful to read it in extenso; "This has reference to your above claim. In this connection, we would like to inform you that on investigation, the damage to the hoe-bucket has been found to have happened due to the regular use of bucket lug, which was cracked earlier due to overloading and breakage of tooth of the bucket and not because of the accident.

Under the circumstances when there is no accident or external impact resulting into this damage, there is no liability of the insurers under the motor policy issued. In the light of the above facts and circumstances, we regret our inability to entertain the claim and as such, the same is treated as ''No Claim''."

ON this letter the words ''without prejudice'' are written.

ACCORDING to the opposite party, the complainant''s claim was not entitled to any amount and so it will be "no claim" on the basis of the expert''s opinion that hoe-bucket was not damaged by accident as alleged by the complainant. Mr. J.C. Jain, learned Counsel appearing for the opposite party (insurer) has placed reliance on M/s. Janata Machine Tools v. Orient Insurance Company Ltd. (Original Petition 12 of 1990 decided on 21.8.90 reported in I (1991) CPJ 234 (NC) by the National Commission. In that case the claim was against the Orient Insurance Company on the ground that there has been a deficiency in the service which the company was bound to render to the complainant under the policies of General Insurance that the complainant has taken out. A counter affidavit was filed by the Orient Insurance Company stating that it had fully investigated into the claim of the complainant. It got the surveys conducted and thereafter came to the conclusion that the claim was false and the complainant was informed about its rejection. In this connection it was observed by the National Commission as under : - "From the facts disclosed by the record and particularly the averments contained in the counter affidavit filed by the first respondent it is seen that the Insurance Company has fully investigated into the claim put forward by the complainant, got surveys conducted and had finally come to the conclusion that the claim put forward by the complainant was false and accordingly informed the complainant that his claim was rejected. Thus, this is not a case where the Insurance Company did not take prompt and necessary steps for deciding the claim under the policies of insurance. It may be that the complainant is not satisfied with the said rejection of his claim by the Insurance Company. Having regard to the facts and circumstances of this case and the nature of the controversy between the parties we consider that this is a matter that should be adjudicated before a civil Court where the complainant as well as the respondent will have ample opportunities to examine witnesses at length, take out Commission for local inspections etc. and have an elaborate trial of the case. Without prejudice to the right of the complainant to take resort to the remedy by way of civil suit before the proper Court, we dismiss this petition."

The facts of the case in hand are more or less the same with those in M/s Janata Machine Tools'' case (supra). In this case the opposite party insurer has filed a counter affidavit stating that the claim was thoroughly scrutinised and examined by it and on the basis of the expert''s opinion it came to the conclusion that the alleged loss and damage was caused not because of accident and so it does not fall within the scope of the policy. Not only that the opposite party obtained technical opinion of the surveyor to confirm that the loss was not due to any accident but otherwise. M/s Janata Machine Tools'' case (supra) is on all fours.

The first contention raised by the learned Counsel for the opposite party cannot be accepted. Re. 2. Mr. J.C. Jain, learned Counsel for the opposite party insurer argued that on the basis of the judgment M/s Special Machine Karnal v. Punjab National Bank & Ors. [reported in I (1991) CPJ 78 (NC)] that this is not a case in which an enquiry can conveniently be held under Section 13(2) of the Act. The complainant has produced many documents in support of the complaint. He has also submitted various affidavits referred to hereinabove to show that the damage and loss to hoe-bucket was caused on account of accident and not otherwise. There is voluminous evidence elaborate enquiry is needed. The evidence has to scrutinised and its assessment has to be made.

A perusal of the application dated 10.9.90 filed by the partner, Mool Chand shows that an order was sought for the production of the documents mentioned therein from the opposite party. These documents are spot survey report, final survey report, 25 photographs, copy of recommendations received from the Regional Manager and a copy of the letter from the opposite party to Shri Vinod Kumar appointing him as Surveyor in mis case. From what has been stated above it follows that there are complicated and complex questions involed in the complaint viz. whether the Excavator had met with an accident as a result of which its hoe-bucket was hit and broken or damage of the hoe-bucket was due to overloading and its regular use and not because of the accident. Both the parties have come with rival version. The above questions cannot conveniently be determined in a summary enquiry. The National Commission in M/s Special Machines, Karnal''s case (supra) has observed as under : - "The procedure for disposal of complaints under the Act has been laid down in Section 13 of the Act, the provisions of which are made applicable to proceedings before the National Commission by Rule 14(2) of the Consumer Protection Rules, 1987. Subsections (2) and (3) of Section 13 of the Act show beyond doubt that the statute does not contemplate the determination of complicated issues of fact involving taking of elaborate oral evidence and adducing of voluminous document evidence and a detailed scrutiny and assessment of such evidence. It is no doubt true that the forums constituted under the Act are vested with the power to examine witnesses on oath and to order discovery and production of documents. But such power is to be exercised in case where the issues involved are simple such as the defective quality of any goods purchased or any shortcoming or inadequacy in the quality, nature and manner of performance of a service which the respondent has contracted to perform for consideration. Even in such cases, if it appears to the concerned Forum under the Act that the issues raised cannot be determined without taking elaborate oral and documentary evidence it is open to it to decline to exercise jurisdiction and refer the party to his ordinary remedy by way of suit. 29. We are accordingly of the opinion that in view of the complex nature of the questions of fact and law arising in the case for the determination for which voluminous oral as well as documentary evidence will have to be adduced and considered involving also the scrutiny and settlement of several accounts which the complainant had with the Bank under various heads for a period of nearly 12 year, no satisfactory adjudication of the matter can be conducted in proceedings under the Act. Hence we decline to adjudicate upon the complaint and refer the complainant to his remedy before the Civil Court."

AFTER considering the principles laid down in M/s Special Machines, Karnal''s case (supra) we are of opinion that the questions raised in this complaint cannot be determined in a summary enquiry, for, an elaborate enquiry is necessary and they can only be decided after examining witnesses and obtaining expert''s opinion. The contention of the opposite party in this connection is also correct. Having regard to the facts and circumstances of the case and the nature of the controversy between the parties, we are of considered opinion that this is a matter that should be adjudicated before the Civil Court, where complainant as well as the opposite party will be able to examine witnesses at length and have an elaborate trial of the case. Without prejudice to the right of complainant to take resort to the remedy by way of Civil Suit before the proper Court we dismiss this petition. There will be no order as to costs.

NOTHING said hereinabove in the order shall adversely and prejudicially affect any of die parties. Petition dismissed.