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2006 (2) CPR 126
CHHATTISGARH STATE CONSUMER DISPUTES REDRESSAL COMMISSION, RAIPUR
V.K. Agarwal, President and R.S. Awasthi, Member
The Oriental Insurance Co. Ltd.—Appellant/Respondent
versus
M/s. Uttam Construction Company—Respondent/Appellant
Appeal Nos. 173/05 and 166/05
Decided on 26-4-2006
Counsel for the parties:
For the Appellant :Shri R.K. Bhawnani, Advocate.
For the Respondent:Shri Shishir Bhandarkar, Advocate.
IMPORTANT POINT
Complainant’s appeal is allowed as Insurance Co. wrongly repudiated the claim of complainant on misreading the excess clause and District Forum erred in exercising its jurisdiction according to law.
Headnote:Consumer Protection Act, 1986 — Section 15 — Appeal — Accident insurance — Occurrence of accident and collapse of part of the bridge causing loss to the scaffolding duly insured — Surveyor misreading the excess clause — Insurance Co. repudiating the claim of
Rs. 16,16,941/- — District Forum refu-sing to interfere on ground of complicated questions involved — Appeal — Whether correct? (No) — Excess clause other than Act of God is attracted — Insurance Co. is liable to pay the claim less excess clause with interest and cost of litigation — Appeal allowed.
Held: The present case certainly would not attract excess clause applicable to AOG because the falling of Super
Structure of the bridge and the consequent damage to scaffolding was an
accident and not an Act of God. Therefore, only 5% of the claim amount could have been deducted, under the excess clause and there was no reason for
disallowing the whole claim of Rs. 16,16,941/- as was agreed to subsequently by the complainant. (Para 15)
Held further: It would therefore appear that OP had considered the claim of the complainant and was of the opinion that the cost of scaffolding damaged during the accident was covered under the CAR policy issued by the OP insurer. (Para 19)
In view of the above circumstances of the mishap, as well as the correspondence mentioned above, it would appear that the repudiation of the complainant’s claim by letter (Annexure C10) based on some imaginary ground regarding excess clause by the surveyor, was not proper. The surveyor’s report as also the repudiation letter C10 issued on the basis thereof, does not appear to be justified. By doing so, the appellant insurer committed deficiency in service.(Para 20)
Held finally: Thus, from the material placed on record, it appears that the amount of Rs.16,16,941/- as agreed to and proposed by the complainant was the actual loss caused to the complainant, there appears to be no reason to discard or disallow the same. The extent and details of loss given by the complainant are fully justified, even by the details of loss given in surveyor’s report dated 8.10.02 (Annexure C12). Therefore, the complainant under the CAR policy appears to be entitled to the above amount subject to excess clause i.e. deduction of 5% of the claim amount, which works out to Rs.80,847.05 (rounded to Rs. 80,900/-). The complainant therefore entitled to Rs. 15,36,041/- (rounded to Rs. 15,36,100.00). Thus, the OP insurer is liable to pay to the complainant Rs.15,36,100/- as compensation under the CAR policy.(Para 22)
Therefore, the Appeal no. 173/05 of the insurer stands dismissed. The
Appeal No. 166/05 stands allowed and instead of compensation awarded by the impugned order, it is directed that the OP insurer shall pay to the complainant Rs. 15,36,100/- with interest @ 9% p.a. payable thereon from 1.06.02. The cost of the litigation including that of the complaint as well as this appeal quantified at Rs. 3,000/- would also be payable by the insurer to the complainant.(Para 23)
Result : Appeal allowed.
V.K. Agarwal, President — Since both these appeals under section 15 of the Consumer Protection Act, 1986 arise from the same order, they are being disposed of by this order.
2. The impugned order dated 15.3.05 was passed in complaint no.
264/04 by District Consumer Disputes Redressal Forum, Raipur (hereinafter called ‘District Forum’ for short) directing that the insurer — Oriental Insurance Company (appellant in Appeal no. 173/05) shall pay Rs. 1,14,814/- as compensation to the complainant — Uttam Construction Company (appellant in Appeal no. 166/05) with interest @ 9% p.a. payable from 27.9.04, as also Rs. 1,000/-as cost of the complaint.
3. Indisputably, the complainant M/s. Uttam Construction Company is a registered partnership firm with its registered head office at Shanker Nagar, Raipur. It undertakes Civil Construction Works, mainly construction of bridges, under the contracts from the Government and the Semi - Government undertaking departments. It is also not in dispute that the complainant had been given a contract of “Special repairs to the damaged Sind Bridge of Guna Ashok Nagar Road” by the Chief Engineer, P.W.D, Project Construction Zone, Bhopal, at an estimated contract value of Rs.85.85 lacs. The complainant contacted the respondents and proposed insurance regarding the above contract covering accidental risks and loss towards—
(i) All the permanent and temporary works required for commission of the contract - including all materials to be incorporated.
(ii) Additional cover towards third party.
(iii) Additional cover towards removal of debris.
4. A proposal (Annexure C2) in that regard covering the contract value of Rs. 86 lacs (by rounding the contract value of Rs. 85.85 lacs) and also covering additional liability towards third party for Rs.5,00,000/- as also additional liability towards removal of debris to the extent of Rs.3,00,000/- was submitted by the complainant to the insurers. It is also not in dispute that “Contractor’s All Risk” (CAR) insurance policy (Annexure C3) was accordingly issued by the insurer in favour of the complainant covering the risk, as above. It is further not in dispute that applicable premium was paid by the complainant to the insurer. The CAR policy issued by the insurer covered the risk from 14.01.02 to 13.01.03.
5. The averments in the comp-laint stated in brief are that during the currency of the said policy on 5.03.02, there was a sudden accidental collapse of RCC Superstructure of Span Unit P-2
P-3 while the same was being dismantled. As a result thereof, the staging erected for dismantling of the aforesaid Superstructure was also crushed below the debris of the old RCC Superstructure of the bridge. It was further averred that the complainant informed about the accident to the insurer on telephone and later on also sent a letter dated 13.3.02 (Annexure C4) regarding the accident as above. The complainant further averred that the insurer appointed a surveyor S.K. Kansal and as desired by him, submitted a quantified claim of Rs.20,35,425/- for the loss suffered on account of damage caused due to the aforesaid accident, by his letter dated 6.05.05 (Annexure C5). The complainant further averred that there was a joint meeting on 14.09.02 with surveyor S.K. Kansal at the site of the work and after discussions of the extent of loss, the complainant revised its claim to Rs. 16,16,941/-as detailed in their letter dated 17.09.02 (Annexure C11). It was also averred that, even thereafter the claim was not paid and despite meeting of the complainant with the respondent’s officers and the surveyor continued to raise queries by sending different letters to the complainant. It was further averred that the complainant’s claim ultimately was repudiated by the insurer by their letter dated 25,6,03 (Annexure C10). Aggrieved, the complainant approached the District Forum and claimed total compensation of Rs. 16,16,941/- with interest and cost.
6. The complaint was resisted by the insurer. In the
