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ANDHRA PRADESH STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, HYDERABAD
Honble Mr. Justice A. Venkatarami Reddy, President;
Mrs. J. Ananda Lakshmi & Mr. K. Ranga Rao, Members
NEW INDIA ASSURANCE CO. LTD. & ANR.—Appellants
versus
KALADI RAMBABU—Respondent
F.A. No. 274 of 1996—Decided on 6.12.1996
Counsel for the Parties :
For the Appellants :Mr. Mandada Srinivasa Rao, Advocate.
For the Respondent:Mr. V. Gourisankara Rao, Advocate.
Delay in settlement of insurance claim amounts to deficiency in service and the consumer is entitled to compensation.
Headnote:
INSURANCE - MARINE INSURANCE - HULL INSURANCE - CLAIM - DELAY IN SETTLEMENT - DEFICIENCY IN SERVICE - COMPENSATION - CONSUMER PROTECTION ACT, 1986 - SECTION 2(1)(g), 14(1)(d).
Fact of the Case:
The complainant took out a Hull Insurance Policy for his boat covering breakage of shaft or burst of boilers. The boat was damaged during fishing operations in 1980. The complainant informed the Insurance Company and submitted necessary papers for settling the claim. The Insurance Company appointed a Surveyor, who assessed the loss at Rs. 16,780/-. The complainant claimed Rs. 30,000/- for repairs and Rs. 10,000/- for mental agony. The Insurance Company repudiated the claim in 1988. The complainant filed a complaint in 1993.
Finding of the Court:
The District Forum held that the complaint was not barred by limitation as the Insurance Company did not produce any evidence of repudiation of the claim. It also held that the damage to the connecting rod due to failure of lubricant oil pump and the cylinder block resulting in damage to crank shaft, pistons etc. was covered by the policy. The District Forum awarded Rs. 16,780/- with interest, Rs. 1,500/- for mental agony and Rs. 500/- for costs.
Issues: 1. Whether the complaint was barred by limitation? 2. Whether the damage to the connecting rod due to failure of lubricant oil pump and the cylinder block resulting in damage to crank shaft, pistons etc. was covered by the policy?
Ratio Decidendi: 1. The complaint was not barred by limitation as the Insurance Company did not produce any evidence of repudiation of the claim. 2. The damage to the connecting rod due to failure of lubricant oil pump and the cylinder block resulting in damage to crank shaft, pistons etc. was covered by the policy.
Final Decision: The appeal was dismissed. There shall be no order as to costs, in this appeal.
Mr. Justice A. Venkatarami Reddy, President— The complainant in C.D. 1053/93, District Forum, Kakinada took out a Hull Insurance Policy for his boat KKD 1217 in 1980 covering the breakage of shaft or burst of boilers. The said fishing boat during fishing operations accidentally got damaged in the high seas and the connecting rod came out resulting in damage to the engine and crank shaft on 10.6.1980. The accident to the engine block, crank shaft, connecting rod, pistons, bearings sells and other allied parts of the engine was informed to the Insurance Company in 1980 itself and the complainant submitted all necessary papers for settling the claim. The Opp. Parties appointed a Surveyor, who assessed the loss at Rs. 16,780/-. Alleging that the complainant got the engine repaired by spending Rs. 30,000/- and that also the authorised mechanic estimated the loss at Rs. 28,290/- according to the rates prevailing in the year 1980, the complaint was filed claiming the said amount with interest, Rs. 10,000/- towards mental agony and Rs. 2,000/- for costs in the year 1993, as the Opposite Parties failed to settle the claim for nearly 13 years. The first Opposite Party filed a counter and contended that the accident occurred in the year 1980 on 10.6.80 and the claim was repudiated in the year 1988 itself under letter No. 6.2.89 and the complaint filed on 10.2.93 is barred by limitation. On merits, it was submitted that the failure of lubricant oil pump resulting in damages to connection rod and the cylinder block are not covered by the policy and, therefore, the Opposite Parties rightly repudiated their liability under the policy. It was further stated that in any event, the complainant could not have spent Rs. 30,000/- and the amount claimed by the complainant is exagerated and no damage was suffered by the complainant.
2. On behalf of the complainant Exs. Al to A4 were marked and on behalf of the Opposite Parties Exs. Bl to B3 were marked.
3. The District Forum held that although the Opposite Parties pleaded that the claim was repudiated on 6.2.1989 they have not filed any letter of repudiation and also did not adduce any evidence to show that such a letter was communicated to the complainant. Had the Opposite Parties sent such a letter of repudiation to the complainant, they would have filed the office copy of the said letter. In the absence of any evidence adduced by the Opposite Parties showing that the claim was repudiated on 6.2.1989, the contention of the Opposite Parties that the complaint was filed beyond the period of three years from the date of repudiation and, therefore, it is hopelessly barred by time was rejected. The District Forum further found that the Opposite Parties did not produce the policy said to have been surrendered by the complainant to the Opposite Parties but a copy of the policy was filed by the complainant on 23.2.1996 which is marked as Ex. A 5 and the Counsel for the complainant also filed the proforma of Marine Hill Policy and Clause 6.2.2. of the proforma policy covers bursting of boilers, breakage of shafts or any latest defect in the machinery in hull. It, therefore held that the breakage of connecting rod resulting in damage to the crank shaft is covered by the policy. With regard to the quantum of loss said to have been suffered by the complainant, the District Forum relied on the Surveyor's report, who assessed the loss at Rs. 16,780/-. The District Forum further held relying on the decision of A.P. State Commission in J. Someswara Rao v. Branch Manager, National Insurance Co. Ltd., Machilipatnam and Others and also the decision of Tamil Nadu State Commission in Sriram Agro Industries Ltd. v. New India Assurance Co. Ltd. and Another, 1993 (1) CPR 300 and the decision of West Bengal State Commission in Bimal Krishna Bose v. United India Insurance Co. Ltd., II (1993) CPJ, P 1087 that the failure of the Opposite Party to settle the claim for a period of nearly 13years though the complainant clai
