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ANDHRA PRADESH STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, HYDERABAD
Hon’ble Mr. Justice S. Parvatha Rao, President;
Mr. K. Ranga Rao & Dr. (Mrs.) Mamata Lakshmanna, Members
M/S. MANJIRA ROCK DRILLERS—Complainant
versus
M/S. UNITED INDIA INSURANCE CO. LTD.—Opp. Party
CD. No. 16 of 1993—Decided on 31.8.1999
Counsel for the Parties :
For the Complainant :Mr. Kota Subba Rao, Advocate.
For the Opposite Party :Mr. K.L.N. Rao, Advocate.
The repudiation of an insurance claim by an insurance company is not deficient in service if it is based on sufficient material showing that the damage was due to an exclusion in the policy and the insurance company applied its mind to the matter.
Headnote:
INSURANCE - REPUDIATION OF CLAIM - MECHANICAL BREAKDOWN - DEFICIENCY IN SERVICE - CONSUMER PROTECTION ACT, 1986 - SECTION 2(1)(g) - SECTION 17(a)(1) - INSURANCE POLICY - INTERPRETATION - SURVEYOR'S REPORT - BURDEN OF PROOF - CONSUMER COURT - JURISDICTION - CIVIL COURT - REMEDY.
Fact of the Case:
The complainant, a firm dealing in borewells, tubewells, and compressor rigs, obtained an insurance policy from the opposite party, United India Insurance Company Ltd., covering the risk of damage to the rig and compressor. On 6.6.1991, the rig was damaged due to a fire explosion in the compressor and engine. The complainant informed the opposite party about the accident and submitted a claim for damages. The opposite party appointed three Surveyors to investigate the matter, who submitted reports stating that the damage was due to mechanical breakdown and not due to explosion. The opposite party repudiated the claim of the complainant on the ground that the damage was due to mechanical breakdown, which was an exclusion in the policy.
Finding of the Court:
The Consumer Court held that there was no deficiency in service on the part of the opposite party and that the complainant was not entitled to the relief of compensation claimed by him. The Court found that the repudiation made by the opposite party of the claim of the complainant was based on sufficient material showing that the damage was due to mechanical breakdown and that the opposite party applied its mind and the repudiation made by it was not arbitrary.
Issues: 1. Whether there was deficiency in service on the part of the opposite party in repudiating the claim of the complainant? 2. Whether the complainant was entitled to the relief of compensation claimed by him?
Ratio Decidendi: 1. The Court held that there was no deficiency in service on the part of the opposite party in repudiating the claim of the complainant because: a) The three Surveyors appointed by the opposite party Insurance Company made a thorough investigation and came to the opinion that the damage to the complainant’s compressor and rig was on account of mechanical breakdown. b) The complainant did not produce any material to show that the damage caused to the compressor and the rig was due to explosion. c) There was no expert opinion on behalf of the complainant to show that the damage caused to the compressor and the rig of the complainant was on account of explosion. d) The man who was in charge of the vehicle at the time of the alleged explosion was not examined by the complainant. e) There was no evidence to show that there was spontaneous combustion. 2. The Court held that the complainant was not entitled to the relief of compensation claimed by him because: a) The damage caused to the compressor and the rig due to breakdown was not covered by the policy. b) The repudiation made by the opposite party of the claim of the complainant was based on sufficient material showing that the damage was due to mechanical breakdown and that the opposite party applied its mind and the repudiation made by it was not arbitrary.
Final Decision: The complaint was dismissed, but without costs in the circumstances of the case. However, this order would not preclude the complainant from approaching the Civil Court for appropriate reliefs.
Mr. K. Ranga Rao, Member—This complaint was presented before this Commission on 28.1.1993 under Section 17(a)(1) of the Consumer Protection Act, 1986 with the following averments.
2. The complainant is a firm dealing in the business of digging borewells, tubewells with compressor and rigs, etc., in addition to doing business in consultation. The complainant obtained an insurance policy bearing No. 051403/31/71/062/91 in respect of Layland Truck and Compressor No. AHA 8145 for the period from 31.3.1991 to 30.3.1992 from United India Insurance Company Ltd. (opposite party) for a total value of Rs. 6,50,000/- covering all the risks of the rig with compressor and other machinery. The rig was damaged on 6.6.1991 due to fire explosion in the compressor and engine when they were on the truck. The complainant immediately informed the opposite party about the accident by his letter dated 7.6.1991. The opposite party appointed one Mr. M.S. Madhava Rao as Surveyor and he enquired into the matter and submitted his report, but the opposite party without settling the claim of the complainant again appointed Mr. Madhusudhan as second Surveyor. But the said Madhusudhan has not come to the complainant to enquire about the matter. The complainant was put in darkness about the progress of his claim. The opposite party again appointed one Shivkumar as a third Surveyor and ultimately repudiated the claim of the complainant by its letter dated 12.8.1992 stating that the damage to the compressor engine fitted on rig mounted truck is due to mechanical breakdown and not due to explosion. The repudiation made by the opposite party is without any basis and is arbitrary. The opposite party is bound to satisfy the complainant with the material in support of the grounds on which it repudiated the claim of the complainant. The complainant sent a letter dated 22.8.1992 protesting to the repudiation made by the opposite party and mentioning all his objections in that letter. The opposite party has not supplied the copies of the reports of the Surveyors. The Surveyors appointed by the opposite party have no basic knowledge in the field. They have not made reliable enquiries from the persons who got good experience in this field. The manufacturer of the rig informed the complainant that there cannot be any mechanical breakdown. The complainant always maintain the vehicles and the machinery in good and perfect condition and there cannot be any scope for any mal-functioning of the rig component. The contention of the opposite party that due to the mechanical breakdown the damage occurred to the machine is not tenable. There is deficiency in service on the part of the opposite party in not settling the claim of the complainant. Therefore, the complainant prays for a direction to the opposite party to pay to him a sum of Rs. 4,00,000/- towards damages and a sum of Rs. 1,00,000/- for the delay in settling the claim.
3. One B.B. Chaya Devi, Divisional Manager of the opposite party Insurance Company at Hyderabad filed a counter affidavit denying the allegations made in the complaint and contending that the opposite party sent a letter dated 14.8.1992 to the complainant repudiating the claim of the complainant on the ground that the damage was due to mechanical breakdown which is an exclusion in the policy, that the matter was openly discussed with the complainant but the complainant was not convinced, that the complainant in his letter dated 7.6.1991 informed the opposite party that Cummins engine fitted to the rig mounted truck was damaged in an explosion while the rig was in operation on 6.6.1991, that the opposite party appointed M.S. Madhava Rao as Surveyor and he submitted his report dated 6.1.1992 opining that the alleged damage to the engine was caused on account of starvation of lubrication which will lead to Gudguen pin wrenching off and hitting the Cylinder block while in motion resulting in the breakdown of cylinder block causing heavy damage to the Cran
