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2006 (3) CPR 111 (NC)
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION,
NEW DELHI
K.S. Gupta, Presiding Member and Mrs. Rajyalakshmi Rao, Member
Vallarupalli Vanaja & Ors.—Appellants
versus
Divisional Manager, New India Assurance Co.—Respondents
First Appeal Nos. 778, 779 and
780 of 2003
Decided on 27-7-2006
Counsel for the parties:
For the Petitioner:Ms. Anjani Aiyagari, Advocate.
For the Respondent:Mr. Sanjeev Sharma, Advocate.
IMPORTANT POINT
There is a deficiency in insurance service in as much as it has issued a wrong or collusive bird insurance policy and has wrongly repudiated the claims of complainants.
Headnote:(i)Consumer Protection Act, 1986 — Sections 2(1)(o) r/w 2(1)(g) and 19
— Appeal against non-allowance of
insurance claim — Possibility of having issued policy of bird insurance wrongly or collusively — Claim for deaths of birds —Not accepted — Whether there is deficiency in insurance service? (Yes).
Held: The Insurance Companies are also required to take the minimum precaution of verifying the initial stock of birds at the time of issuing the insurance policy. If they have issued any such insurance policy without even verifying the number of birds it can only be either by collusion or because of gross negligence. In either case they should bear the consequence of having issued an insurance policy wrongly or collusively. On the basis of some alleged discrepancies in the purchase vouchers one cannot deny that there were no birds at all. There is ample evidence on record in the form of detailed reports of the Surveys conducted over a large number of days and the Veterinary Doctor who certified the deaths that the alleged deaths in fact had taken place. As brought out earlier, the deaths in the second phase allegedly caused by the sunstroke have not even been surveyed and if surveyed, no proper record has been brought on record.(Para 21)
Under the circumstances it has to be held that there has been a deficiency in service by the Insurance Company in not accepting the claim and the Complainant’s need to be given relief.(Para 22)
(ii)Consumer Protection Act, 1986 — Sections 19, 14 — Deficiency in insurance service — Relief to be given — Whether case be remanded? (No, it will cause great delay) — Value of claim
payable in three appeals assessed and
direction issued to pay — Appeals allowed accordingly.
Held: The question arises that as to what type of relief can be given. In the absence of proper and adequate basic material on record, one option is to remand the case to the State Commission for a fresh trial. However, the case relates to the period 1998 and remand may result in a further delay of few more years.(Para 22)
In F.A. No.779, out of a claim of deaths of 2328 birds in the 41st and 42nd weeks, the Surveyor has allowed 1917 deaths. This works out to allowing 82% of the claim of death.(Para 23)
In F.A. No. 778, out of the total claimed deaths of 3214 in the 26th and 27th weeks, the Surveyor recommended accepting 2737 deaths. This accounts for accepting 85% of the deaths. We therefore proposed to adopt the figure of 80% of total deaths as a reasonable figure.(Para 24)
The Surveyor has further calculated the claim at the rate of Rs.58/- per bird for the deaths which took place at the age of 41st and 42nd weeks. We propose to adopt the same figure for birds which died in the 41st week or thereafter. For birds which died at less than 41 weeks, we adopt Rs.75/- per bird.(Para 25)
In FA No.778, out of the total claimed deaths of 9138 birds, 6808 are aged less than 41 weeks and 2330 are aged 41 and 42 weeks. In F.A.780, all the dead birds (10,060) are aged less than 23 weeks. In F.A. 779, out of a total death of 6764 claimed, 1972 are less than 41 weeks and 4792 are aged more than 41 weeks. The liability of the insurer under the policies is also restricted to 80% of the deaths. In addition, we note that the Surveyors have deducted1% of the total flock, as a possible excess. This would mean a total deduction of 41%. (20% + 20%+1%) from the claims made. (Para 26)
Taking all the factors we assess the value of claim payable as 51% of the claim, taking value of prime birds at Rs.75/- and of older birds at Rs.58/- per bird. On this basis the amounts payable by the respondent in F.A. Nos. 778, 779 & 780 are Rs.3,80,987/-, Rs.2,51,243/- and Rs.4,45,155/- respectively. The Respondent, M/s. New India Assurance Co. Ltd. is directed to pay these amounts to the appellants within one month of the receipt of this order failing which the amount would carry an interest of 8%. Appellants are allowed with cost of Rs.5,000/- in each of the Appeals to be paid by the Respondent to Appellants.(Para 27)
Result : Appeals allowed accordingly.
Mrs. Rajyalakshmi Rao, Member — These are a set of three Appeals; two Appeals F.A. 778 and 780 are filed by Vanaja and F.A. No. 779 of 2003 is filed by N. Viswanadham, father of Vanaja as their complaints in C.D.37/99, 38/99 and 39/99 were dismissed by the State Commission by a common order dated 27.8.2003. The facts are similar in all cases and hence these are being disposed of by a common order. Both Vanaja and Viswanadham run poultry business. Young chicks are purchased from other parties and they are grown into matured birds by the appellants and then sold in the market. The young chicks pass through various stages during their growth known as brooders, growers and layers and are shifted in the farm to different sheds respectively known as Brooder sheds (young chicks are kept till they reach the age of 8 weeks ), Grower sheds (where birds are kept from 8 weeks age to 22 weeks age) and Layer sheds (where they remain till they reach 72 weeks of age).
2. Insurance policies are taken from the respondent Company, New India Assurance Co. Ltd. to cover the risk of death of these birds during the period of their breeding. According to the terms of the policy, no claim is permitted within the first 15 days from the commencement of the policy. Liability of the insurance Company for the subsequent period is also limited to 80% of the cost of the dead birds.. There is no dispute between the parties about these conditions. The dispute is only about the liability of the Insurance Company for the death of the birds which occurred after the first 15 days.
3. In the matter covered by F.A. No.778, the facts are similar and Smt. Vanaja states that she purchased 12500 of 20 weeks of age from one E. Krishniah. In all 9138 are claimed to have died during the ages of 25 weeks, 26 weeks and 27 weeks and again in 39 weeks, 40th week, 41st week and 42nd week due to sunstroke. A claim of Rs.5,48,280/- was made against the Respondent.
4. In the matter covered by F.A.No.779, the appellant Shri N. Viswanadham is the father of Smt. Vanaja. He claims that he purchased 10150 birds of 24 week old age of which in all 6764 birds died during the 31st, 32nd and 33rd weeks due to cholera and in the 41st, 42nd, 43rd and 47th weeks due to sunstroke.
5. In the matter covered by F.A. No. 780, Smt. Vanaja’s case is that she bought 15750 birds of 5 weeks age (brooders) from one Shri Krishniah, though her father N. Viswanadham, who himself is a poultry farmer (and who himself is also the Appellant in F.A. 779/2003). The insurance policy was taken soon after their purchase and insurance premium was paid. Out of these birds, some birds died in their 10th week due to a disease called “Coxydiasis”. Again in the 11th week some more died due to the same disease. Further in the 20th, 21st, 22nd and 23rd weeks more birds died due to sunstroke. It was stated by the appellants that the 1998 summer in the area was very severe with temperature varying from 42 Centigrade to 49 Centigrade. In this particular case a total of 10,060 birds died and the Respondent Insurance Company was informed of the deaths as and when they took place. As the birds were insured for a peak value of Rs.75/- each in all a claim of Rs.6,03,600/- (i.e. 80% of the loss) was made against the Respondent.
6. In the two cases, F. A. No. 778 & F.A. No. 779 respectively, the Surveyor appointed by the Insurance Company recommended acceptance of the claim to the extent of Rs. 1,56,720/- ( for 2737 birds) and Rs. 88,948/- (for 1917 birds). However, subsequently the Insurance Company seems to have appointed an Investigator. However, as there was no reply from the Insurance Company, a legal notice was issued by the Complainant in all these cases on 28.9.1998. The Respondent Insurance Company repudiated the claims on 18.12.1998 on the ground that; (i) the purchase vouchers submitted were found to be false; (ii) that the total number of birds shown as received is much more than the actual holding capacity of the sheds;
