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NATIONAL COMMISSION DISPUTES REDRESSAL COMMISSION, NEW DELHI
Prem Narain, Presiding Member
Remi Edelstahi Tubulars Limited —Appellant
versus
IFFCO Tokio General Insurance
Co. Ltd. —Respondent
First Appeal No.179 of 2015
(Against the Order dated 28/11/2014 in Complaint No. 58/2009 of the State Commission Maharashtra)
Decided on 10.8.2018
Counsel for the Parties:
For the Appellant:Ms. Sukruta A. Chimalker, Advocate with Mr. S.B. Prabhavalkar, Advocate
For the Respondent:Mr. Rahul Srivastava, Advocate with Mr. Tushar Mathur, Advocate
IMPORTANT POINT
When the terms of the policy are not adhered to and repudiates the claim on frivolous grounds, the insurance company is liable to pay the claimed amount with interest and costs.
Headnote:Consumer Protection Act, 1986—Section 21—First Appeal—Appellant is a company and a part of the prestigious REMI Group of Companies and is engaged, inter alia, in the business of manufacturing, importing and exporting of stainless steel welded and seamless pipes of various sizes and grades—In the year 2002, the appellant had installed a windmill of 600 MW in the Brahmenwel region of Dhule District in Maharashtra—A policy was obtained from the O.P. for the machinery and premium was also paid by the complainant—On 15/16 Aug., 2006, the supervisor noticed some sounds and stopped the windmill and found that there is a breakdown in the gear box of the windmill—Insurance Company was informed and surveyor was appointed to assess the loss who surveyed and the insurance company repudiated the claim on frivolous grounds—Hence, complaint was filed who dismissed the same—Hence, the present appeal—Heard the counsels, perused the documents and the case law cited—It is held that had the proposal form was filed, the complainant will be entitled to more compensation, however the appeal is allowed directing the O.P. to pay an amount of Rs. 7,00,000/- within a period of 45 days failing which the insurance company shall be liable to pay interest @ 9% p.a. till actual payment—The First Appeal No.179/2015 is accordingly disposed of in terms of the this order—No order as to cost for this appeal.
Result: First Appeal is allowed partly. No costs.
1. This appeal has been filed by the appellant, Remi Edilstahi Tabulars Ltd. against the order 28.11.2014 passed by the State Consumer Disputes Redressal Commission, Maharashtra (for short, State Commission) in CC No. CC/09/58.
2. Brief facts of the case are that appellant company is incorporated and registered under the Companies Act, 1956 and is part of the prestigious REMI Group of Companies and is engaged, inter alia, in the business of manufacturing, importing and exporting of stainless steel welded and seamless pipes of various sizes and grades. In the year 2002 the appellant had installed a windmill of 600 MW in the Brahmenwel region of Dhule District in Maharashtra. The appellant paid an amount of Rs.1,11,500/- (plus service tax) as premium to the opposite party and the opposite party had issued Policy No 2006/32013460/IMB dated June 3, 2006. On 15/16 Aug., 2006 at about midnight, the site in charge of the operation observed an abnormal sound and immediately stopped the windmill for inspection and upon inspection, found that there was a machinery breakdown in the windmill since there was a breakdown in the gear box. Appellant lodged a claim for Rs.49,50,000/- (being the estimated amount of loss due to the damage caused to the windmill) with the opposite party under the said policy. On 25.8.2006 the opposite party appointed Cunningham Lindsey International Pvt. Ltd. as a surveyor to carry out the survey. On 29.3.2007 the opposite party repudiated the claim of the appellant on the ground that the claim allegedly fell under the special exclusion No.C which provided that loss or damage as a direct consequence of the continual influence of operation (e.g. wear and tear, cavitation, erosion, corrosion, incrustation) or of gradual deterioration due to atmospheric conditions would not be covered. On 28.4.2007 the appellant vide its letter to the opposite party pointing out that there was no evidence to show that the loss was due to gradual wear and tear and that it was a clear and genuine case of machinery breakdown. On 26.2.2009 the appellant received an email from the opposite party repudiating the claim on the completely baseless and flimsy ground that the loss had occurred at the location which was not covered under the policy. On 26.3.2009, the appellant filed complaint before the State Commission. On 28.11.2014 after hearing the parties the State Commission dismissed the complaint.
3. Hence this appeal.
4. Heard the learned counsel for the parties and perused the record. Learned counsel for the appellant/complainant stated that the State Commission has dismissed the complaint mainly on two grounds. First, the State Commission has accepted the report of the surveyor that the breakdown of the gear box of the windmill is the result of normal wear and tear due to continuous use and therefore, the case is covered under Exclusion Clause 5 of the policy. Secondly, the State Commission has also agreed with the assertion of the insurance company given in their e-mail repudiating the claim on 26.2.2009 that the risk location given in the policy does not tally with the location of the damaged machine. First of all, the learned counsel argued that initially the complainant represented against the first repudiation letter dated 29.3.2007 and the insurance company agreed to reconsider the claim but finally repudiated on 26.2.2009 by taking totally different stand that the damaged property was not covered under the risk location given in the policy. In this respect, the first repudiation letter becomes redundant and objection raised by the surveyor from the insurance company becomes meaningless because the insurance company has finally repudiated the claim on a different ground. It was further argued by the learned counsel that the surveyor has not given any reasoning behind his thinking that the breakdown may be due to normal wear and tear. It was argued that the breakdown was sudden and it has been supported by the affidavit of the
