P.L. AHUJA vs Indian Oil Corporation

MR. P.L. Ahuja is owner of house No. JP-117, Pitam Pura, Delhi. At the relevant time, the ground floor was let-out by him and he was residing in two-room flat on the first floor alongwith his wife and three children. The complainant is employed as a Senior Manager in Oriental Bank of Commerce. The Oriental Bank of Commerce had obtained insurance cover from the Oriental Insurance Company with regard to the immovable property of its employees which was in force at the relevant time.

THE complainant was using LPG gas in the kitchen. He was a registered consumer with M/s. Vidya Saran Gas Agency, opposite party 2. THE said gas agency dealer had taken insurance cover from New India Assurance Company for the period 27.9.92 to 26.9.93 for a sum of Rs. 10 lacs and a sum not exceeding 2.5 lacs in individual cases. THE New India Assurance Company has been impleaded as opposite party 3. On 13.11.92 when the complainant as well as his wife were away in connection with their service and the children were away to their schools etc. at about 11.45 the neighbours heard two loud explosions one after the other and also fire on the first floor of the building in which the complainant was residing. The neighbours in- formed the complainant, his wife, the police and the fire brigade. The Indian Oil Corporation which had been impleaded as opposite party 1 was also informed. The fire was brought under control but in the meanwhile the fire had caused extensive damage both to the building as well as the household effects. Under the policy taken by the employer Oriental Bank of Commerce and on the report of Bakshi Surveyors Pvt. Ltd. dated 12.2.93 the Insurance Company has settled the claim of the complainant/his employer the bank for a sum of Rs. 50,975/- insofar as damage to the immovable property i.e., the house and its furniture is concerned. The present claim is with regard to the household affects which were covered under the miscellaneous policy taken by the gas agency from New India Assurance Company.

It is not disputed that the New India Assurance Company, opposite party 3 on being informed of the occurrence, deputed V.N. Sareen & Co. Surveyors. The said Surveyor carried out a preliminary survey and submitted their report dated 17.11.92. Therefore, H.L. Ahuja was deputed to investigate the facts regarding the occurrence. He submitted his report dated 19.12.93. In due course V.N. Sareen & Co. Surveyors submitted their report dated 18.5.93 which has not been placed on record by the Insurance Company.

IN the complaint it has been averred that the fire took place on account of leakage of the gas cylinder(s). The leakage was either due to manufacturing fault or because of defective sealing. The complainant claimed compensation amounting to Rs. 3.79 lacs, besides interest @ 18%. Indian Oil Corporation failed to contest the claim. Written version was, however, filed by opposite party 2 as well as opposite party 3.

THE stand of opposite party 2 is that the present dispute cannot be settled without elaborate evidence and the complainant should be relegated to his remedy by a Civil Suit. Further plea taken is that the cause of fire has not been established and it had also not been proved that there was leakage from the cylinder and whether the leakage was on account of manufacturing defect or improper sealing. It was further pleaded that opposite party 2 was only working as an agent of Indian Oil Corporation and the cylinders were manufactured by Indian Oil Corporation and they were kept in the godowns and at the time of delivery the sealing was again checked. THE opposite party denied any deficiency in service. In the written statement filed by opposite party 3, the existence of the insurance policy was admitted. It was further stated that during the investigation and survey it was reported that the fire was caused due to bursting of cylinder and accordingly the answering Insurance Company asked the insured, gas agency, to furnish test certificate report regarding alleged manufacturing defect in the gas cylinder but the gas agency failed to submit the same. It was re-iterated that the maximum liability for individual cases ex- tended upto Rs. 2.5 lacs only. It was further stated that the complainant received Rs. 50.975/- from the other Insurance Company and he was estopped from claiming any further amount. The parties have filed affidavits. Agree- ment between Indian Oil Corporation and the gas agency has also been placed on record. We have heard learned Counsel for the parties.

ACCORDING to the agreement between Indian Oil Corporation and the gas agency, opposite party 2 which may be seen at pages 21 to 24 of the paper-book, the distributor, opposite party 2 was appointed on principal to principal basis. Para 17 of the agreement at page 22 of the paper-book completely absolved the Indian Oil Corporation from its liability and the liability, if any, is of the distributor. This very question came up for consideration before the Supreme Court in Indian Oil Corporation v. Consumer Protection Council Kerala & Ors., II (1994) CPJ 21 (SC) and it was held that in view of the said agreement the distributor could not be considered agent of Indian Oil Corporation and Indian Oil Corporation could not be held liable for acts of omission and commission of the distributor. The complainant, therefore, has no claim against Indian Oil Corporation and the complaint is dismissed against opposite party 1.

THE main question which was debated before us is whether the fire took place as a result of the leakage of the gas from the LPG cylinders. THE main contention of learned Counsel for opposite parties No. 2 & 3 was that there is not enough material on the record to show that the fire took place on account of leakage of gas from the cylinders and about ignition of that gas so as to result in explosions. We have very carefully examined the various reports placed on record and in our view the cause of fire stands established in this case. THE earliest in point of time is the report of H.L. Ahuja dated 19.12.93. After setting-out the necessary background, the investigations carried out by him and the reasons, Mr. Ahuja stated as under in the conclusion at page 80 of the paper-book: "From the facts and circumstances discussed above and in the absence of any evidence to the contrary, it appears to be a genuine case of loss by fire at the house of Mr. P.L. Ahuja at first floor of JP-117 Pitam Pura, Delhi. THE Fire appears to have been caused by leakage of gas from LPG gas cylinder keep at the house of Mr. Ahuja. It also appears that the leakage was due to manufacturing defect in the cylinder. THE loss is being assessed by the Surveyor."

Bakshi Surveyors Pvt. Ltd. also surveyed the place of occurrence in order to settle the claim with regard to damage to the immovable property under another insurance policy obtained by the employer of the complainant. THE said Surveyor expressed the following conclusion in its report at page-89 of the paper-book. "In our opinion the gas was leaking from the gas cylinder that was in use. This leaked gas which collected at the ground level of the kitchen exploded due to a spark in the relay of the refrigerator, that was lying nearby. As a result of this gas explosion, a fire also started in the house of the insured. THE heat so generated by this fire caused the explosion of other cylinder that was kept as a standby in the vicinity." As stated earlier the Insurance Company has not placed on record the final report submitted by the Surveyor V.N. Sarin & Co. However, from the documents placed on record we find that V.N, Sarin & Co. wrote to the Insurance Company vide their letter dated 23.2.93 (at page 81 of the paper- book) as follows: "You may please note that after necessary verification we have finalised the assessment of loss with Mr. P.L. Ahuja and M/s. Vidya Sagar Gas Agency in respect of loss suffered towards building and contents. However, we have kept issuance of survey and assessment report in abeyance because of the following reasons:"

Reasons stated therein are not material for the present purposes. We may also refer to a letter dated 23.1.93 (at page 19 of the paper-book) which was written by the gas agency, opposite party 2, as follows: "With reference to the query made by M/s. V.N. Sarin & Company, Rajendra Place, New Delhi regarding assessment of loss in property No. JP 117, Pitam Pura, Delhi (Consumer No. 1068) determined by them as Rs. 3,50,838/- we wish to inform that the loss assessed seems to be correct."

Reading these two letters together namely letter written by V.N. Sarin & Co. dated 23.2.93 and the letter written by the gas agency dated 23.1.93 together with the fact that the Insurance Company has withheld the final report submitted by the Surveyor V.N. Sarin & Co. the irresistible conclusion is that V.N. Sarin & Co. had assessed thelossatRs.3,50,838/- and the assessment was confirmed as correct by the letter written by the gas agency. We may add that the amount received by the complainant under the other policy from Oriental Insurance Company is regarding loss suffered by the building and the furniture and fixtures and as the present loss relates to other house-hold effects, there is no justification to set off the said amount in the amount to be paid in the present case. The contention of Mr. R.K. Kashyap, learned Counsel for opposite party 2 is two-fold. He firstly submitted that the case involves determination of complicated facts especially with regard to cause of the fire and, therefore, the complainant should be relegated to the Civil Court. The second submission is that the burden of proving the cause of the fire was on the complainant. It was he who was to prove two material facts namely (a) that the fire took place on account of leakage from the gas cylinder; and (b) as to who provided the naked flame or the spark. According to the learned Counsel, since the complainant failed to establish either of these two requirements he must fail. We have given our anxious consideration to the above contention. In the facts and circumstances of the case we do not think that complicated facts are involved to justify disposal of the complaint leaving the complainant to have his remedy in the Civil Court. The fire was noticed immediately by the neighbours who telephoned the police, fire- brigade as well as the complainant and his wife and within a short time all these reached the spot. There is irrefutable evidence on record to prove that the neighbours heard two explosions one followed by the other. These were on account of exploding of the gas cylinders. The conclusion reached by V.N. Sarin & Co. who was deputed to carry out preliminary survey and who ultimately prepared a final report as well as H.L. Ahuja, who investigated the occurrence and submitted a detailed report was the same as was independently reached by independent survey and investigation carried out by Bakshi & Co., Survey ors appointed by another Insurance Company. The opinion of Bakshi as well as Ahuja have been re-produced in the earlier part of this order. V.N. Sarin appears to have concurred with the said conclusion and i.e., why they framed an assessment of the loss suffered by the complainant which report has not been placed on record by the Insurance Company, opposite party 3. The statements of the immediate neighbours were re- corded and are available on record. One lady officer of the Indian Oil Corporation probably by the name of Mrs. Deepa Puri also reached the spot and on the basis of her observations she is also stated to have expressed the view that the fire took place on account of leakage of gas cylinder. In the facts and circumstances of the case, we think that it will be only of academic interest to determine whether the leakage of the cylinder was on account of manufacturing defect or improper or defective sealing. It is also of academic interest to determine whether the leakage started with the cylinder which had been fitted in the kitchen or the other cylinder which was kept outside the kitchen as a standby replacement. What is significant is that the neighbours heard two explosions indicating the two gas cylinders. According to the report prepared by M.P. Bakshi Surveyors Pvt. Ltd. the gas which leaked caught fire because of the sparking in the relay of the refrigerator. It is common knowledge that every refrigerator is fitted with a relay which in lay- man''s words is an electrically operated switch. When the temperature rises above a certain level the switch puts the compressor of the refrigerator on. In the process of switch off and on there is a spark. It is again common knowledge that refrigerators are kept working 24 hours in order to maintain the desired temperature. The ignition was, thus, provided by the relay of the refrigerator. It will be seen in the list of items that were destroyed by the fire, item No. 1 is the refrigerator. There is, thus, no manner of doubt that the fire took place on account of leaking gas from the LPG gas cylinders and the fire was ignited by the relay switch of the refrigerator.

This brings us to the last question namely amount of compensation. The report dated 18.5.93 submitted by V.N. Sarin & Co. has been withheld by the Insurance Company. Infect, the Insurance Company appears to have washed off its hands on the ground that inspite of repeatedly writing to the insured, the gas agency, it was not provided with test report certificate. In the facts of the case discussed above, the test report certificate was a needless formality. The unanimous opinion of the three Surveyors/Investigators who went into the question, was that the fire was caused due to leakage from the gas cylinders. There was irrefutable evidence of the explosions caused by bursting of two gas cylinders one after the other. It was of purely academic interest whether the gas cylinder suffered from manufacturing defect or improper sealing. At the most it can be said that in the absence of laboratory test the defect could not be described as manufacturing defect. The loss in individual cases is limited to Rs. 2.5 lacs in terms of the policy. After careful consideration of the totality of facts and circumstances we direct National Insurance Company to pay Rs. 2.5 lacs to the complainant alongwith interest @ 18% p.a. on the said amount w.e.f. 13.11.92 upto the date of payment. The Insurance Company shall also pay Rs. 2,500/-on account of costs. The complaint is disposed of in these terms. A copy of the order be conveyed to the parties. Complaint disposed of with costs.