SONI HOSPITAL vs ORIENTAL INSURANCE CO LTD

SONI Hospital, Jaipur, the complainant, had obtained an electronic equipment insurance policy, being No. 44/95/00018 for the period from 20.2.1995 to 19.2.1996 from the Oriental Insurance Co. Ltd., the O.P. company. The policy covered loss/material damage to the C.T. scan Machine of the complainant. The said machine, inter alia, consisted of Rotanx X -ray Tube Unit worth Rs. 13,28,800/. The C.T. scan machine including the said unit was manufactured by SIEMENS Ltd. The sum insured was Rs. 90,00,000/ - and the O.P. company had charged a sum of Rs. 94,264/ - as premium for one year.

DURING the period of currency of the insurance policy, there was a breakdown of the insured machine. The complainant reported the non -working condition of the insured property to the O.P. company on 24.4.1995 and also to the manufacturers, SIEMENS Ltd. The O.P. company deputed their Surveyor and Loss Assessor to examine the loss/damage to the insured property and assess the loss. A Surveyor is stated to have been appointed by the O.P. company and he is alleged to have submitted his report to it but no such report of the Surveyor has been brought on our record. The complainant has, however, submitted the communication sent to it by SIEMENS Ltd., the manufacturers, confirming total damage of the Rotanx X -ray Tube and advising immediate replacement thereof.

THE complainant duly submitted its claim to the O.P. company for reimbursement of the cost of the damage Rotanx X -ray Tube Unit but the O.P. company repudiated such claim on the ground of the said part of the C.T. Machine not included in the insured articles as per report of the Surveyor and if insured than the damage to it not caused indirectly but directly. Hence this complaint by the complainant hospital.

THE parties were heard and the material placed by them on our record was gone through. By complainants letter dated 24.4.1995 to the O.P. company (Ann. 2) and letter dated 26.4.1995 by SIEMENS Ltd., New Delhi to the complainant (Ann. 3) it is established on record that the Rontax X -ray Tube Unit had got damaged and the same needed immediate replacement for the functioning of the C.T. scan machine. The replacement cost of the damaged part was Rs. 13,28,800/ -. This factual position is also not denied by the O.P. company as its sole case is that the damaged part was not amongst the insured parts of the said machine.

IN support of its case, the O.P. company placed reliance on the report of its Surveyor and paras 1 and J of the Especial Exclusion Clause of Section 1 of the insurance policy. We, however, find no substance in such reliance.

INSOFAR as the reliance of the O.P. company on the alleged report of its surveyor is concerned no such report has been placed before us. In the absence of the production of such a material document before us no opinion can be formed about its existence even what to speak of its relevance and evidentiary value. Instead, from O.P. companys conduct of non -production of such a document an adverse inference to the effect that had such a document been produced, it would have not supported the version of the O.P., may be drawn against the O.P. company. Now insofar as the other ground of repudiation is concerned, it has been described in the letter of repudiation dated 22.5.1997 in following words: ''The Competent Authority has advised repudiation of above claim on the following grounds: The paras 1 and J of the Special Exclusions to Section -1 of the Electronic Equipment Policy are quite clear that only indirect losses to the tubes are covered and not direct losses. Thus, if for example, the picture tube had been destroyed say by Fire, such a loss to the tube would have been indemnified by the policy, of course after deducting the necessary depreciation (as provided by the ''Basis of Indemnity Section'' of the Policy). On the other hand, any direct loss to the tube, say by a defect in its own internal working is not payable. In the present case, the Surveyors assessment had been sought as to whether the loss to the picture tube was a direct or indirect one. He has confirmed that the loss to the picture tube was a direct loss and hence not indemnifiable by the policy. Hence we regret that the claim file is closed as no claim. This is for your information.''

THE ground of repudiation of complainants claim, as reproduced above, discloses that it attracts para J of the Exclusionary Clause to Section 1 of the Policy. Para J reads as under: ''Loss destruction or damage directly occasioned by pressure wave caused by aircraft and other aerial devices travelling at Sonic or Supersonic speeds.''

Para (d) of the Exclusionary Clause deals with the ''direct'' and ''indirect'' loss, spoken of in the letter of repudiation. It reads as under:

''loss or damage as a direct consequence of the continual influence of operation (e.g. wear and tear, cavitation, erosion, corrosion, incrustation) or of gradual deterioration due to atmospheric conditions.''

IT may be noted that in reading the above para in the manner it does and regarding the damaged Rotanx X -ray Tube Unit costing Rs. 13,28,800/ - as a tube mentioned in para J and declared as subject to normal ''wear'' and ''tear'', the O.P. company has sought strength from the ''non -produced opinion'' of the Surveyor whose name has not even been disclosed by it. Be that as it may, it could not be disputed before us that Rotanx X -ray Tube Unit is an integral part of the C.T. scanning machine as it helps the machine to obtain the X -ray film of the X -rayed part of the body of the person concerned. Such an integral part of the C.T. scan machine cannot be, by any stretch of imagination, equated to the tubes and rubber tyres, etc. subject to normal wear and tear. The ''tube'' talked of in para J has to carry the same sense and meaning as the words ''bulb valves, ribbons, fuses, seals, bells, etc. etc. connote. For, a word, more often than not, carries the same sense and meaning as the other words in whose company it has been used. It is unimaginable that an integral part costing at Rs. 13,28,800/ - of a machine costing more than Rs. 90 lakhs may be equated in use and utility to an article costing few rupees only.

HERE , it is worthmentioning that after the instant claim of the complainant, the O.P. company itself insured the C.T. Scanner of the complainant for Rs. 77 lakhs charging premium at Rs. 73,516/ - for the period from 4.3.1996 to 3.3.1997 and in giving the description of the insured items excluded the Rotanx X -ray Tube Unit by specifically mentioning the same as tube. In the schedule attached to the policy in question for the period from 20.2.1995 to 19.2.1996 no such exclusion of ''tube'' from the articles insured had been mentioned by the O.P. company.

TO sum up, we hold that the O.P. company had absolutely no valid and reasonable ground for repudiating the just and bona fide claim of the complainant. Therefore, in repudiating the complainants claim, the O.P. company had rendered deficient services to him. Any deduction from the cost of the damaged Rotanx X -ray Tube Unit as claimed and proved by the complainant, on account of depreciation was not pressed before us. Instead in para 1 sub -headed as ''Sum Insured'' under the head ''Provisions Applying to Section 1'', it has been mentioned that - ''It is the requirement of this insurance that the sum insured shall be equal to the cost of replacement of the insured property by new property of the same kind and same capacity, which shall mean its replacement cost including freight, dues and custom duties, if any and erection costs''.

The cost of replacement, as claimed by the complainant is thus not required by any amount on account of depreciation particularly when such cost does not include any sum on account of freight, dues and erection costs.

IN the result, this complaint succeeds and is allowed with cost at Rs. 10,000/ -. The O.P. company is directed to pay a sum of Rs. 13,28,800/ - to the complainant with interest @ 9% p.a. from 1.7.1995 within a period of three months from the date of service of this order on them failing which the interest shall be payable @ 12% p.a. from the aforesaid date till full and final payment. Complaint allowed with costs.