UNITED INDIA INSURANCE CO. LTD. vs Purshotam Lal And Ors.

THE complainant late Sh. Purshotam Lal took an insurance policy from the petitioner Company in respect of stock of vegetables, fruits and other goods, plastic crates used for packing of vegetables and fruits and for shed made of bamboos with plastic sheets which he was using as Godown for storing fruits and vegetables. The complainant used to purchase raw bananas from wholesale market and sell the same after ripening them in a Coal Bhatti, which he had installed in his store. The store had been covered with bricks and walls and there was no window in it. It is thus evident that the Coal Bhatti was being used for the purpose of ripening the raw bananas kept in the store. According to the complainant, one truck load of bananas had been kept in the stores in plastic sheds for the purpose of ripening when his son Mr. Shiv Kumar entered the store at 4.45pm on 23.12.2005 and switched on the light. All of a sudden, carbon monoxide inside the shed resulted in explosion in the store and the entire building of the store collapsed. The brick walls as well as RCC slab of the godown turned into debris. The plastic crates and banana kept inside those crates were badly damaged due to explosion. Since the crates as well as the banana stocks were covered under the insurance policy taken by the complainant, a claim was lodged by him with the petitioner Company.

MR . Surinder Kumar Soni was appointed as the Surveyor to assess the loss caused to the complainant. The aforesaid Surveyor assessed the net loss to the complainant at Rs. 1,23,229/ -. The claim, however, was rejected by the Insurance Company on the ground that the loss was covered under the exclusion clause contained in the insurance policy. Being aggrieved, the complainant approached the concerned District Forum by way of a complaint. The complaint was resisted on the ground that the claim fell within the purview of the exclusion clause in the policy and use of Bhatti in the shop amounting to violation of the policy. Vide its order dated 03.12.2008, the District Forum partly allowed the complaint and directed the petitioner Company to pay a sum of Rs. 1,23,299/ - to the complainant alongwith compensation quantified at Rs. 5,000/ - and cost of litigation quantified at Rs. 2,000/ -.

BEING aggrieved from the order of the District forum, the petitioner Company approached the concerned State Commission by way of an appeal. The said appeal having been dismissed vide impugned order dated 13.10.2009, the Insurance Company is before this Commission by way of this revision petition.

THE State Commission ruled in favour of the complainant primarily on the ground that the exclusion clause contained in the insurance policy was not brought to the notice of the complainant. Reliance in this regard was placed on Regulation 3(1) of the IRDA (Protection of Policyholders'' Interest) Regulation 2002, which reads as under: - - "3. Point of sale. - -(1) Notwithstanding anything mentioned in regulation 2(e) above, a prospectus of any insurance product shall clearly state the scope of benefits, the extent of insurance cover and in an explicit manner explain the warranties, exceptions and conditions of the insurance cover and, in case of life insurance, whether the product is participating (with profits) or non -participating (without profits). The allowable rider or riders on the product shall be clearly spelt out with regard to their scope of benefits, and in no case, the premium relatable to health related or critical illness riders in the case of term or group products shall exceed 100% of premium under the basic product. All other riders put together shall be subject to a ceiling of 30 per cent of the premium of the basic product. Any benefit arising under each of the riders shall not exceed the sum assured under the basic product:

Provided that the benefit amount under riders shall be subject to section 2 (11) of the Insurance Act, 1938."

We have scrutinised the complaint filed before the District Forum. There is no averment in the complaint that the insurance policy was not supplied to the complainant. In the absence of such an averment, it was not open to the State Commission to take the view that the exclusion clause was not in the knowledge of the complainant. Even if we presume that only the cover note was received by the complainant, it was for him to ask the Insurance Company to supply the policy, subject matter of the insurance cover. The insurance commenced on 01.02.2005, whereas the loss occurred on 23.12.2005. There is no evidence of the complainant having written to the petitioner at any point of time during the above referred period of more than ten months, seeking the insurance policy subject matter of the cover notes, issued to him. The inevitable inference in these circumstances would be that he had received the policy document form the insurer and that is why he did not ask for any such document for more than ten months from the date of commencement of the policy. The aforesaid inference finds corroboration from the fact that in the complaint there was no specific averment that the policy document was not supplied to the complainant. Therefore, I have no hesitation in holding that the policy document having been supplied to the complainant, he was very well aware of the exclusion clause contained therein.

THE exclusion clause on which reliance is placed by the petitioner Company reads as under: - - "I Fire

Excluding destruction or damage caused to the property insured by

(a) (i) its own fermentation natural heating or spontaneous combustion.

(ii) its undergoing any heating or drying process.

(b) burning of property insured by order of any public Authority."

It would thus be seen that the insurer is not liable in case the insured property is damaged or gets destroyed while undergoing any heating or drying process. The bananas obviously were undergoing the process of ripening by heating using the Coal Bhatti installed inside the store of the complainant, at the time when the son of the complainant entered the place where heating process was going on and the carbon monoxide which had generated inside the godown got ignited and led to destruction or damage of the fruits as well as crates in which the said fruits were being ripened at the time the incident took place. Therefore, there is no escape from the conclusion that the loss to the complainant was covered under the exclusion clause contained in the insurance policy. Consequently, the Insurance Company is not liable to reimburse the complainant for the loss suffered by him.

FOR the reasons stated hereinabove, the impugned orders are set aside and the complaint is dismissed. No order as to cost. The Revision Petition stands disposed of.