Oriental Insurance Company Ltd. vs LEO EARTHMOVER (P) LTD.

THE challenge in this appeal is to the order of the District Forum, Kangra at Dharamshala, dated 20.5.1996, whereby the appellant/opposite party No. 1 (hereinafter to be referred to as the Insurance Company) has been directed to pay the complainant/ respondent (hereinafter to be referred to as the complainant) a sum of Rs. 50,000/-alongwith interest @ 15% per annum with effect from 1.12.1994 till actual payment and a compensation of Rs. 5.000/-and also costs of Rs. 1,000/-.

THE relevant brief facts of the case are that the complainant was the owner of certain machinery which was insured by the complainant with the Insurance Company under Contractor''s Plant & Machinery Insurance Policy for Rs.10,00,000/-with effect from 31.2.1994 to 25.2.1996. On 25.8.1996, the insured machinery suffered partial damage, such as, loss of Hydraulic Pump''s parts and gears etc. in the Plant at Village Damtal, Tehsil Nurpur, District Kangra. THE claim was preferred with the Insurance Company and according to the complainant, the Surveyor assessed the loss at Rs. 50,000/-and submitted his report to the Insurance Company. Unfortunately, according to the complainant, the claim has been repudiated arbitrarily by the Insurance Company. Mr. B.S. Parmar, learned Counsel for the Insurance Company has submitted that the case of the complainant is about Machinery Break Down (M.B.D.) and the risk (M.B.D.) no doubt is covered under the Cover Note (Annexure ''B'') but later on the policy (Annexure ''D'') -Contractor''s Plant & Machinery Insurance Policy (C.P.M. Cover) was issued to the complainant and under this policy vide Exception Clause (b), the risk of M.B.D. is not covered. Further, according to Mr. Parmar, the learned Counsel though the Cover Note (Annexure ''B) which admittedly covers the case of Machinery''s Break Down (M.B.D.) provides exception at the bottom that "the risk is hereby insured, subject to the usual terms and conditions of the Company''s Standard Policy" and according to the policy (Annexure ''D'') issued subsequently, this risk is no longer covered and, therefore there is breach of the terms of contract of insurance and the complainant is not entitled to any damage as claimed by him.

We are afraid we are unable to appreciate this submission of Mr. Parmar. We have seen the reply of the Insurance Company and nowhere has it been stated by Insurance Company that after issuing of new policy to the party, the Cover Note stands cancelled or does not govern the case. We have seen the Cover Note which provides that the risk of Machinery''s Break Down is covered, subject to usual terms and conditions of the Company''s standard policy. The only reasonable interpretation which can be put to such a clause is that the Cover Note which covers the risk of Machinery''s Break Down (M.B.D.) will continue to govern subject to the usual terms and conditions of the standard policy. The complexion of the insurance policy altogether cannot be changed and standard policy can be issued in consonance with the Cover Note. It appears that the Insurance Company erroneously has issued another policy which they cannot issue unless the Cover Note is cancelled. It has not been further disputed by the learned Counsel for the Insurance Company that the premium on the basis of the risk of Machinery''s Break Down (M.B.D.) which is covered under the Cover Note, is being paid by the complainant to the Insurance Company and is being accepted by the Insurance Company.

THE learned Counsel for the complainant has brought to our notice the insurance policy (Annexure ''C'') issued by the Insurance Company but the same has been denied by the learned Counsel for the Insurance Company. Without prejudice to the respective rights and contentions of the parties, we are of the opinion that only Standard Policy in consonance with the risk covered under the Cover Note regarding break-down etc; could only have been issued by the Insurance Company. At any rate, no case has been set up by the Insurance Company in their reply that the case is not covered under the Insurance Cover and that stands cancelled and the premium is not being paid and accepted in accordance with the Insurance Cover. Merely the mistake of the Insurance Company in issuing another policy when the complainant has asked for another policy (sic.) which is covered by Cover Note (M.B.D.) should not debar the complainant to get his claim under the Cover Note. Mr. B.S. Parmar, learned Counsel for the Insurance Company has next contended that no loss for an amount of Rs. 50,000/-has been proved by the complainant by way of evidence. In this context we may notice that the legal notice was issued by the complainant (Annexure ''G'') wherein the Counsel for the complainant has clearly stated that the Surveyor deputed by the Insurance Company has assessed the loss at Rs. 50,000/-.In reply to legal notice (Page-84) it has been clearly stated by the Counsel for the Insurance Company that the Surveyor has assessed the loss, which is beyond the scope of the Policy and which cannot be considered for payment. Even in their reply in Para 4, the Insurance Company have again stated that the Surveyor has assessed the loss which is beyond the scope of the policy and his report is not binding on the respondents. This clearly shows that the Surveyor must have assessed the loss of Rs. 50,000/-. That''s why the case set up by the appellant-Insurance Company is that such assessment is beyond the scope of the policy and such report is not binding upon the respondents. In these facts and circumstances, we assess the loss at Rs. 50,000/-. Normally, we would have accepted better evidence but it will defeat the very purpose of the Consumer Protection Act if the party is dragged to another round of litigation. We are in agreement with the findings of the District Forum. There is no force in this appeal and the appeal is accordingly dismissed with no orders as to costs. Appeal dismissed.