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Khanna Paper Mills Ltd., Punjab v/s United India Insurance Co. Ltd., Punjab

    Consumer Case No. 122 of 2012

    Decided On, 23 February 2022

    At, National Consumer Disputes Redressal Commission NCDRC

    By, MEMBER

    For the Complainant: Sameer Nandwani, Advocate. For the Opposite Parties: Abhishek Gola, Advocate.

Judgment Text

1. Heard Mr. Sameer Nandwani, Advocate, for the complainant and Mr. Abhishek Gola, Advocate, for the opposite party.

2. Khanna Paper Mills Limited has filed aforementioned complaint for directing United India Insurance Company Ltd. (the Insurer) to pay (i) insurance claim of Rs.10939329/- along with interest @18% per annum, from the date of filing of the complaint till actual payment, (ii) cost of the litigation and (iii) any other relief which is deemed fit and proper, in the facts and circumstances of the case.

3. The facts, as stated in the complaint and emerged from the documents attached with the complaint, are as follows:-

(a) The complainant (hereinafter referred to as the Insured) was a company incorporated under Companies, Act, 1956 and engaged in the business of manufacture, sale and export of various kinds of quality papers by recycling the waste paper, which were 100% delinked wood free recovered paper. The Insured had a unique state-of-the-art well equipped with latest technology. Annual production of the Insured was 3300 MT of the board, writing and printing paper, in the year of incident. The factory used to run 24 hours continuously. A small breakdown in the machinery may halt the whole production process, reducing production considerably and for this reason the Insured used to repair and restore the machinery without any delay, at its own end and maintain necessary infrastructure for that purpose.

(b) United India Insurance Company Ltd. is a public insurance company, engaged in the business of providing different types of insurance services. The Insured used to obtain “Industrial All Risk Policy” from the Insurer, since 1992. The Insured obtained Policy No.200200/11/09/06/00000002, for a sum of Rs.920/- crores, for the period of 01.04.2009 to 31.03.2010, which was a renewal of earlier policy, on (1) Building inclusive permanent fixture fitting used as paper mill, (2) Plant & Machinery of KMP inclusive pipes fittings, accessories and (3) Stocks of all kind of papers, raw materials, finished and semi-finished in factory premises at Fatehgarh Road, Amritsar.

(c) On 26.10.2009, some hard metallic material fell on the belt and passed through KMP 5 Roller & Felt and damaged them. The Insured informed the Insurer about the aforesaid damage through letter dated 26.10.2009. The Insurer appointed Er. Rajesh Kapoor, Amritsar, for preliminary survey, who inspected the damaged KMP 5 Roller & Felt on 26.10.2009 and submitted his Preliminary Survey Report dated 07.11.2009, stating that incident occurred accidently and confirming the damage.

(d) The Insurer appointed Kapoor & Company, Surveyor & Loss Assessor, Ludhiana, for survey and assessment of loss on 06.11.2009. The Surveyor inspected the factory premises on 10.11.2009. By that time, damaged KMP 5 Roller & Felt were already repaired/replaced. The Surveyor, vide letter dated 11.11.2009, demanded (i) Estimate of repairs/replacement of Roller Cover, with name and address of the firm to whom the repair job was entrusted. (ii) Copy of Log Sheet. (iii) Copy of fixed assets forming part of the Balance Sheet as on 25.10.2009. (iv) Date of commissioning of the plant No. KPM 5 and information whether the replaced Roller was lying as spare with you already purchased along with this plant or otherwise. The Surveyor issued reminders dated 05.02.2010, 06.04.2010 and 27.09.2010 and emails dated 05.02.2010 and 28.09.2010, but the required papers were not supplied.

(e) Due to non-supply of the requisite papers, the Surveyor submitted Survey Report dated 05.10.2010, stating therein that the cost of new Roller was Rs.8/- lacs. The Felt was a component which was most wearable part and practically replaced between 60 to 70 days and it had consumed its life. Excess clause of the policy was up to Rs.5/- lacs. Due to non-supply of the requisite papers, the claim was not payable. Then the Insurer, vide letter dated 08.11.2010, absolved itself from the liability and closed the claim.

(f) The Insured submitted the required papers along with claim form on 11.10.2010 to the Surveyor. The complainant vide letter dated 15.11.2010 requested to re-open the claim as he had supplied the claim along with documentary evidence on 11.10.2010 to the surveyor. But neither the claim was re-opened nor any reply of the letter dated 15.11.2010 was given. Then this complaint was filed on 07.05.2012 on the allegation that repudiation of the claim was illegal. The damage of felt has been termed as wear and tear in the repudiation letter, without considering the fact that it was accidental damage, causing break-down of the machinery due to which the production had been substantially affected. Although the complainant through RTI sought for copy of the survey report, but it was not supplied to the complainant. The damage caused to the roller and felt were fully covered under the policy and the claim has been illegally repudiated.

4. The insurer filed its written reply on 04.10.2012 and contested the complaint. The Insurer raised the preliminary objection that the complainant was doing commercial activities on large scale and was not a consumer as well as the claim was of Rs.6967110/- as such this Commission has no pecuniary jurisdiction. It has been stated that there were no deficiency in service on the part of the Insurer. However, the fact of obtaining “Industrial All Risk Policy” for the period of 01.04.2009 to 31.03.2010 has not been disputed. It has been stated that on receiving the information, the insurer appointed Er. Rajesh Kapoor for preliminary survey, who conducted the preliminary survey on 26.10.2009 and submitted his Preliminary Survey Report dated 07.11.2009. The insurer appointed M/s. Kapoor & Company on 06.11.2009 for final survey and assessment of loss. The Surveyor visited the factory of the complainant on 10.11.2009 and inspected the damaged goods, by that time damaged goods were already replaced/repaired. Thereafter, the Surveyor wrote letters dated 11.11.2009, 05.02.2010, 06.04.2010 and 27.09.2010 and e-mails dated 05.02.2010 and 28.09.2010 calling for the claim as well as the various documents to prove the claim. In spite of repeated reminders, given by the Surveyor, the Insured did not supply either the claim form or the required documents nor gave any reply to the Surveyor. The Surveyor, therefore, submitted his Final Survey Report dated 05.10.2010, in which, it has been stated that although the Insured allegedly entrusted the repair work of the roller covered/shell to some foreign company, but no details were submitted in this respect. So far as the damage to felt was concerned, the felt has 60 to 70 days life and comes in the category of wear and tear and the loss was not payable. Mr. Ashish Gulati, Manager Machine Process informed that machine KPM-V, BELOIT was initially procured from Canada and commissioned in November, 2008, but no document in this respect was supplied. The complainant vide letter dated 10.11.2009 informed the Divisional Office of the Insured that damaged roll had been replaced with one lying with them which was supplied along with the machine. Although the Insured, in his letter, stated that the machine was made functional by replacing the roller lying with them, but they did not disclose the name of the repairer. At the time of preliminary survey, the Insured informed Er. Rajesh Kapoor that cost of the roller was approximately Rs.800000/- while in the insurance policy the excess clause contained Rs.500000/-. The felt is a component, which were fully covered in term with “wear and tear” having its life of 60 to 70 days as such its claim was not payable. After examining the Preliminary Survey Report dated 07.11.2009 and Final Survey Report dated 05.10.2010, the insurer was fully satisfied that the claim was not payable as such the claim was repudiated by the letter dated 08.11.2010. After the report submitted by the surveyor on 05.10.2010, the claim form was allegedly submitted on 11.10.2010 to the Surveyor. The incident occurred on 26.10.2009 and the Insured took almost one year in submitting the claim form as well as the documents, in support of it as such the claim was not bona fide and has been rightly repudiated.

5. The Insured filed his rejoinder reply on 19.08.2013 in which the material facts as stated in the complaint have been reiterated. The Insured filed Affidavit of Evidence of Sh. Vikas Kapoor. Insurer filed Affidavit of Evidence of Satish Sharma, Deputy Manager, Er. Rajesh Kapoor, the preliminary surveyor and A.S.Kapoor, the surveyor. Both the parties filed their short synopsis.

6. We have considered the arguments of the counsel for the parties and examined the record. Incident occurred on 26.10.2009. Er. Rajesh Kapoor inspected factory premises of the Insured on 26.10.2009. He found that KPM-V unit Third Press Ventagrooved Roller and its Felt were damaged due to entry of some foreign material. A groove of 10 mm wide & 5 mm deep on the roller and the felt and a hole like mark was visible at the time of inspection. As informed by the Process Manager, the damaged felt was installed on 02.09.2009, however, log book was not produced before Er. Rajesh Kapoor, therefore, date of installation was not confirmed. He further noted that the damaged felt was replaced on the same day and roller was replaced within a week as informed by the employees of the Insured. At the time of his further inspection the machine was found running. From the preliminary Survey Report dated 07.11.2009, it is proved that by that time the machinery was repaired and running.

7. The insurer in the repudiation letter has stated that felt fell in the category of “wear and tear” having maximum life of 60 to 70 days. According to the Preliminary Survey Report the felt had already run 54 days, therefore, no claim of the felt was payable. This finding has not been challenged by the Insured in the complaint.

8. So far as the roller is concerned, according to the Preliminary Survey Report roller was repaired within a week. The surveyor in his Final Survey Report dated 05.10.2010 has mentioned the cost of roller as Rs.800000/-. But it was not proved that new roller was got imported and replaced as such the Surveyor reported

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for repudiation of the claim as Rs.500000/- was excess clause in the Policy. The Insured took about one year time in submitting the Claim Form and the relevant documents in which the cost of New Cover Ventagroove Roll was shown total Rs.6967110/-. Its Bill of Entry is dated 28.06.2010. This Roll was purchased long after the incident dated 26.10.2009. No evidence has been adduced that a new cover for ventagroove roll was replaced for the damaged roller. In such circumstances, the claim was not proved. 9. The Insured has not filed any evidence to prove that due to alleged break-down of the machinery, he had suffered any business loss. In the Claim Form, Rs.6967110/- was claimed. In the complaint, Rs.10939329/- is being claimed. If the Roller was repaired within a week, then only repairing cost would have been claimed. In spite of repeated reminders by the Surveyor, the Insured could not supply the name of repairer. The claim is exaggerated as such the repudiation letter does not suffer from any illegality. O R D E R In view of aforementioned discussions, the complaint has no merit and is dismissed.