Jagannath Bag, Member
The present appeal is directed against the Order, dated 21.02.14 , passed by the Ld. District Consumer Disputes Redressal Forum, Kolkata , Unit –II , in CC No. 250 of 2013 , whereby the complaint was allowed on contest without cost against the OP.
The complaint case, in brief, was as follows:
The Complainant purchased one Standard Fire and Special Perils Policy for its factory. The Insurance policy was valid from 27.06.2012 to 26.06.2013. A fire broke out in the factory of the Complainant on 11.07.2012 at about 1 a.m. As the fire was controlled and extinguished within a very short time, neither the police authority nor the fire brigade office was informed about the occurrence of fire. The Insurance Company was intimated on 11.07.12 about the loss with request for inspection and assessment of the loss. The Insurance Company appointed a surveyor who visited the site on 17.07.2012 and submitted his survey report on 21.09.12. After submission of all documents as asked for by the Surveyor and issue of subsequent letter and reminder to the Insurance Company, the Insurance Company issued a letter dated 13.12.12 stating that the cause of loss is not covered under the policy. i.e., excluded under the general exclusion clause No. 7 of Standard Fire and Special Perils Policy, though the Surveyor assessed the loss at Rs.1,36,389/- in his report. Referring to the findings of the surveyor, the Complainant wrote a number of letters to the Insurance Company for settlement of the claim but no response was received. Hence, the complaint case was filed with a prayer for direction upon the O.Ps to make payment of the sum of Rs. 1,36,389/- with cost and expenses incurred and interest @ 12 % p.a. from the date of claim lodged upon the insurer and compensation totaling to Rs. 1,97,389/-.
The complaint was contested by the OP who in their W.V. submitted that there was a willful negligence on the part of the Complainant to comply with settled norms in intimating the police and fire brigade about the occurrence of the fire . It was also submitted that surveyor’s report was duly consulted and the claim of the Complainant was repudiated as per exclusion clause No. 7 of the policy . It was further submitted that the surveyor confirmed non-admissibility of the and as such, the complaint was liable to be dismissed.
Ld. Forum below, having heard Ld. Lawyers of both parties and upon consideration of materials on record , observed that though the Complainant failed to produce the fire license for running his factory and though there is no report of the fire brigade about the cause of the accident , it was on the basis of the report of the Surveyor that the claim was repudiated but the Surveyor failed to search out any cause of the incident of fire , though he opined that the accident might have happened due to short circuit which caused the damage. The Surveyor assessed the loss and advised the OP to release the claimed amount . Ld. Forum observed that in spite of the fact that there were some faults on the part of the Complainant/Respondent the insured must not be deprived of relief when loss assessor assessed the loss to the extent of Rs. 1,36,389/- . Ld. Forum below relied upon the judgment of the Hon’ble Supreme Court passed in the year 1996 ( no specific reference) and another judgment passed by Justice T.K. Chakrobarty ( no specific reference mention) from which it appears that for technical grounds entire claim must not been dishonoured. Accordingly, a sum of Rs. 75,000/- was allowed by the Ld. Forum below with the observation that the Insurance Company ought to have been very social in their approach at the time of disposal of such claim. Ld. Forum below directed the OP Insurance Co. to pay a sum of Rs. 75,000/- as final compensation in respect of the claim as made by the Complainant within a period of one month from the date of order failing which penal interest @ Rs. 100/- shall be assessed till full satisfaction.
Being aggrieved by and dissatisfied with the order of the Ld. Forum below, the OP Insurance Company has come up with the present appeal with prayer for direction to set aside the impugned order with dismissal of the complaint.
The memorandum of appeal has been filed together with copies of the impugned order, the petition of complaint, the W.V. filed by the OP Insurance Company before the Ld. Forum below , the final survey report and, among other documents, the letter of the Insurance Company dated 13.12.2012 repudiating the claim on the ground of General Exclusion Clause No. 7 of the Standard Fire and Special Perils Policy.
Ld. Advocate appearing for the Appellant submitted that the Complainant violated the policy condition in so far as they did not inform the local police station and the fire brigade about the alleged incident of fire in their premises on 11.07.12. Further, the damage alleged to have been suffered by the Respondent / Complainant was excluded vide policy General Exclusion Clause No. 7. The order of the Ld. Forum below directing the Appellant to pay Rs. 75,000/- to the Respondent is wholly arbitrary, as such award is nothing but an ex-gratia payment which is beyond the scope of policy terms and conditions. The complaint did not have any merit and the impugned order deserves to be set aside.
Ld. Advocate appearing for the Respondent submitted that the Surveyor in his final survey report recorded that all warranties under the policy were found to be observed . If that is the case , the Insurance Company did not and should not have any prejudice about the report . Any addition or alternation in the report should have been effected by way of addendum and not by writing of a letter as happened in the present case . The fire originated in the switch board and that spread to the panel board of the machine which is not excluded under exclusion Clause 7 of the policy. The exclusion clause as noted by the Insurance Company does not extend to the electrical machine destroyed / damaged by the fire which originated in the switch board that was affected first . In fact the short circuit was in the meter board and the fire caused by such short circuit affected the electrical machine which according to the exclusion clause -7 of the policy falls under the category of other electrical machine or apparatus which is not covered by the said clause-7. The surveyor was satisfied about the loss which was assessed at Rs. 1,36,389/- and which is well within the sum assured . The Insurance Company was intimated immediately after the occurrence of fire and the surveyor by his spot visit assessed the loss . There was no suppression by the Respondent /Complainant that since the accidental fire was controlled within a very short time , no FIR was lodged or no intimation to the fire brigade was given . The award of Rs. 75,000/- by the Ld. Forum is much less than the actual loss and there is no specific reason as to why the claim was reduced to more than 50 % , the impugned order is arbitrary and deserves to be set aside as the Complainant suffered a huge loss of about Rs. 5,00,000/-. The appeal , therefore, may be dismissed.
Decision with Reasons:
The point for consideration is whether the impugned order suffers from any material irregularity or jurisdictional error.
There is no dispute that the Complainant’s Insurance Policy was valid while an accidental fire took place on 11.07.2012 by which the panel board of the machine installed in the factory of the Complainant caught fire.
The Survey report did not have any adverse comment as regards loss of the machine which was assessed at Rs. 1,36,389/-. It was by a letter dated 06.12.2012 written to the Insurance Company subsequent to the submission of the final report that the claim was said to be under Exclusion Clause No. 7. Such remark of the Surveyor does not appear to be part of his report as that was not really an ‘additional survey report’ as provided under the IRDA (Protection of Interest ) REG. 2002 under sub clause 5 of Clause No. 9 . The remark of the surveyor was communicated by a letter dated 06.12.2012 in response to a letter of the insurance company dated 21.11.2012. As provided under the said Regulation 2002 , a request for furnishing an additional report on certain specific issues may be made within 15 days of the original survey report as provided under clause 9/(3) of the Regulation . The survey report was filed on 21.09.2012, but the request for opinion in respect of some other issue was sought for on 21.11.2012 which was much beyond the specified period of 15 days as noted in the Regulation 9/(3) and which was not intimated to the insured . As such, the remark of the Surveyor that the claim attracts exclusion clause No. 7 of the policy and there is no liability of the insurer is of no material value. The citation of order of the Hon’ble National Consumer Disputes Redressal Commission in 2012 (4) CPR 205 (NC) does not appear to be applicable as there is no proof that the records asked for by surveyor were not supplied by the Respondent /Complainant . Further, the citation of the order of the Hon’ble Supreme Court as reported in 2010 ( 2) Supreme 663 does not help the Appellant as the deficiency in service on the part of the Insurance Company has been brought to the light in so far as the survey report itself shows that the relevant documents and records were examined as stated under paragraph 10 of the survey report and the insured had suffered a genuine loss under insured peril.
We are inclined to hold that the Ld. Forum below did a material mistake in overlooking the fact that the loss suffered by the Respondent / Complainant was due to the damage of the panel board of the machine which was covered by the policy in question as the said machine was within the category of ‘other machine, apparatus , fixtures or fittings’ appearing in general exclusion clause No. 7 . There is force in the argument of the Ld. Advocate of the Res
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pondent / Complainant that the short circuit affected the meter board and the fire caused by such short circuit in the meter board damaged the panel board of the machine insured. Again, the final report of the Surveyor does not include any additional report as discussed herein above. As such we are not inclined to accept the remark of the surveyor about applicability of Exclusion Clause No.7 of the policy. The impugned order may, therefore , be modified with dismissal of the appeal. Hence, Ordered That the appeal be and the same is dismissed on contest. The impugned order be modified to the effect that a sum of Rs. 1,36,389/- shall be released by the Appellant Insurance Company to the Respondent / Complainant with interest @ 9% p.a. with effect from date of submission of the claim . The entire amount shall be paid within a period of 40 days from the date of this order, failing which further interest @ 10% p.a. on the decretal amount shall accrue till full realization. Ld. Forum’s direction regarding payment of penal interest @ Rs. 100/- stands deleted . The complaint stands allowed.