NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Ram Surat Ram Maurya, Presiding Member
M/s. Regency Aqua-Electro Abd Motel Resorts Ltd. – Complainant
versus
United India Insurance Company Ltd. and Anr. – Opp. Parties
Consumer Case No.241 of 2018
Decided on 5.10.2021

IMPORTANT POINT
“A court of higher jurisdiction can always decide the cases relating to lesser valuation of its pecuniary jurisdiction.”

Headnote:

Consumer Protection Act, 1986 – Section 21 : [Consumer Protection Act, 2019 – Section 58] – Hydroelectricity Power Project – Damage due to flood or inundation – Due to sudden increase in discharge of water in the river, the tank collapsed along the river side – Surveyor assessed the loss of profit to Rs. 53,92,418/- – Losses are liable to be reimbursed – Since insurer in not doing anything in the matter, there was deficiency in service on its part – Insurer also liable to pay interest at the market rate after expiry of six months of the loss – Opposite party directed to pay Rs. 22,32,900/- and Rs. 53,93,107; under respective policies – Along with interest @ 9% p.a.

Held: The Consumer Protection Act, 1986 (hereinafter referred to as the Act) was enacted with object to provide for better protection of the interests of the consumers and for that purpose, consumer council and other authorities for settlement of consumer disputes have been established. Section 13 (4) confers same powers for trial of the dispute upon the authorities under the Act, which are vested in Civil Court under Code of Civil Procedure, 1908, while trying a suit in respect of (i) the summoning and enforcing the attendance of any defendant or witness and examining the witness on oath, (ii) the discovery and production of any document or other material object producible as evidence, (iii) the reception of evidence on affidavits, (iv) the requisitioning of the report of the concerned analysis or test the appropriate laboratory or from other relevant source, (v) issuing of any commission for the examination of any witness and (vi) any other matter which may be prescribed. Although under the Act, the jurisdiction of the authorities is limited to consumer complaint, but while deciding such complaint no limit has been fixed for adjudicatory power. The authorities are conferred jurisdiction to decide the issue of “unfair trade practice” which has been defined under Section 2 (r) of the Act. This definition is similar to the definition of “fraud” as given under Section 17 of Indian Contract Act, 1872. From these provisions it is clear that this Commission can hold a full trail as held by civil court or adopt summary procedure for decision of any complaint. In the present case, none of the parties has demanded for full trial as held by civil court and both the parties have adduced their oral evidence in the shape of affidavit and documentary evidence. None of them sought for cross examination of the deponents of the affidavit or for summoning of any other witness. A Bench of three Judges of Supreme Court in Dr. J.J. Merchant Vs. Shrinath Chaturvedi, (2002) 6 SCC 635, (paragraph-7) held that the object and purpose of the Act is to render simple, inexpensive and speedy remedy to the consumer with complaint against defective goods and deficient services, it being a benevolent piece of legislation, intended to protect a large body of consumer from exploitation. Consumer Forum is an alternate Forum, established under the Act, to discharge the function of Civil Court. The argument that the complicated question of fact cannot be decided by the Forum, has been specifically rejected (In paragraph-12). Similar view has been taken in Amar Jwala Paper Mills Vs. State Bank of India, (1998) 8 SCC 387, CCI Chambers Coop. Hsg. Society Ltd. Vs. Development Credit Bank Ltd. (2003) 7 SCC 233. This view has been reaffirmed by three Judges Bench of Supreme Court, in IFFCO Tokiyo General Insurance Company Ltd. Vs. Pearl Beverages Ltd., 2021 SCC OnLine SC 309. The Insurer earlier also raised this issue, which has not been accepted by this Commission in its judgment dated 03.03.2016, which has become final and is binding upon the Insurer.

So far as the arguments that the complainant is not a consumer as he is engaged in commercial activities are concerned, Supreme Court in Leelavati Kirtilal Mehta Medical Trust Vs. Unique Shanti Developers, (2020) 2 SCC 265, has that if the person engaged in commercial activities has purchased the goods or availed the services for his own use, then he is consumer. In the present case, Insurance Services have been availed for personal use and not for earning any profit from it as such the complainant is a consumer. So far as the arguments that the complaint was not filed by an authorised person of the company is concerned, in Rejoinder Reply, it has been stated that due to typographical error, in the resolution of Board of Director of the complainant, “Private” word has been typed.

So far as the question of limitation is concerned, the surveyor has submitted his report on 10.11.2010 and 23.12.2011 but the matter is still pending. Admittedly no repudiation order has been passed by the Insurer. The claim was filed before insurer on 27.04.2010. In the absence of any repudiation letter, cause of action is continuing day to day and the complaint cannot be said to be barred by limitation. Supreme Court in Transport Corporation of India Vs. Veljan Hydrair Ltd. (2007) 3 SCC 142, has held that in the absence of refusal to deliver the consignment, limitation for action would not start to run.

Pecuniary jurisdiction of this Commission was Rs. one crore or above. Earlier, in some cases, it has been held that valuation of the claim in complaint is relevant for deciding the jurisdiction. However, in Ambrish Kumar Shukla Vs. Ferrous Industries Pvt. Limited 2017 (1) CPJ 1, it has been held that under Section 21 of the Act, value of the goods or service and compensation are relevant for deciding pecuniary jurisdiction. The value of Insurance Policy in the present case is more than Rs. one crore. In any case, the issue of pecuniary jurisdiction does not cause any obstacle for this Commission as it is well settled that a court of higher jurisdiction can always decide the cases relating to lesser valuation of its pecuniary jurisdiction as such there is no substance in this argument. So far as the arguments that there were two policies are concerned, the parties were same and the claim of second policy depends upon allowing the claim under first policy as such single complaint can be filed and the joinder of causes of action is permissible.

The main dispute between the parties is as to whether the damage of the plant was caused due to “flood or inundation”, which is a peril specified under Clause-vi or due to “river erosion” as falling in exclusion clause (c) of Clause-viii of the Policy. According to the complainant, on 26.04.2010 at 5.55 P.M., plant was functioning. Intake gate of D-slit Tank was opened to allow the water intake into the system. Due to sudden high discharge, in the River Hanumanganga, a flash flood developed in the tank and which created excessive pressure of water in the tank, due to which RHS wall of D-slit tank was sheared off. Due to flood/inundation, the soil under the D-slit tank washed away and the tank collapsed along the river side. The damage was cause due to flood/ inundation in the River as in high hill area, there was sudden heavy snowmelt on that day. The Insurer does not deny collapsing of D-slit Tank of the project on 26.04.2010, however took plea that the constructional damage or burst in D-slit tank was caused due to river erosion, which was due to natural flow of the River and not due to flood.

The Insurer appointed M/s. Rakesh Kapoor & Co., Noida for spot survey of the incident and assess the loss. The Surveyor inspected the project on 28.04.2010, 29.04.2010 and 30.04.2010. On 28.04.2010, they could very well verify as to whether there was any sign of flood in the River on 26.04.2010 or not. Tehsildar Barkot gave a certificate relating to sudden surge in the water level in Hanumanganga River on 26.04.2010, resulting the flood in the area of Hanuman Chatti. The report of the Surveyor dated 10.11.2010 is based upon personal inspection of the site on 28.04.2010 and also upon the certificate of Tehsildar Barkot. In email dated 15.07.2011, the Surveyor has again clarified that the stream of Hanumanganga passes through forest area from upper hills/mountains. It draws water either from rain or snowmelt. On 25.04.2010 and 26.04.2010, there was no rain in upper hills/mountains. Due to heavy snowmelt in upper hills on 26.04.2010, there was heavy discharge of water in the river. The very purpose of appointment of spot surveyor at the time of incident is that he can verify the cause of damage on the spot and test the version of the Insured in respect of the cause. There is no reason to disbelieve the Surveyor’s report. There is no reason to ignore the certificate of Tehsildar Barkot, in this case, who was a local officer. This Commission, in First Appeal No. 320 of 1994 Oriental Insurance Company Ltd. Vs. M/s. Mayur Restaurant and Bar, (decided on 18.08.1998) and First Appeal No. 782 of 2007, Oriental Insurance Company Ltd. Vs. R.P. Bricks, (decided on 15.05.2013) has relied upon the certificate of the revenue officer, in respect of flood.

The Insurer is relying upon the report of Investigator. The Insurer appointed Sharma & Associates, Investigator & Loss Assessor, on 10.01.2011, for investigation in respect of the cause of loss. Mr. Devinder Sharma, Investigator, did not have the opportunity to personally verify the flood at that time. Mr. Devinder Sharma, Investigator submitted his report dated 18.01.2011 stating that the present loss seemed to be a constructional damage or burst in the lake water stored by the complainant for the power project and not due to any peril. When some query was made by the Insurer from the Investigator, then, he, through letter dated 21.04.2011, informed that he had obtained a report of Meteorological Department Barkot Uttarkashi, showing that no rain was reported at Barkot and all other reporting stations of district Uttarkashi, on 25.04.2010 and 26.04.2010. Forecast issued on these dates showed mainly dry weather in Uttarakhand and no snowmelt data record available to them. Along with the report dated 21.04.2011, he had supplied a letter of Mr. Anand Kumar Sharma, Director, Meteorological Centre, Dehradun. His report that he had verified from Meteorological Department Barkot Uttarkashi, is false, inasmuch as there was no reporting centre of Meteorological Department at Barkot. Dehradun situate at a distance of 175 KM away from Hanuman Chatti. In case, it did not have any data relating to snowmelt in Hanumanganga which is a local river, then it was not unnatural. This Commission, in First Appeal No. 268 of 2006 Bajaj Allianz General Insurance Company Ltd. Vs. Atibir Industries Company Ltd. (decided on 17.10.2011) has not relied upon the report of Meteorological Department as its office was located at a distance of 130 KM away from the place of incident. In such circumstance, the Investigator report is not liable to be relied upon.

The complainant has stated that the project remained closed due to aforesaid reason from 26.04.2010 at 6.00 P.M. to 24.07.2010 till 9.00 P.M. i.e. for 88.62 days, which caused profit loss of Rs.127,95,461/- which is on the average of previous year revenue income. The loss was also covered in Policy No.47. The Surveyor in his report dated 23.12.2011 assessed the loss of profit to Rs. 53,92,418/-. The losses are liable to be reimbursed, but the insurer is not doing anything in the matter, therefore, there was deficiency in service on its part.

Under Regulation-9 of Insurance Regulatory and Development Authority (Protection of Policy Holders Interest) Regulation, 2002, the Insurer is liable to pay interest at the market rate after expiry of six months of the loss.

So far as the argument that the insurance policy contained bank clause and the concerned bank was not impleaded as party in the complaint as such there was defect of non-joinder of necessary party is concerned, the bank clause is relevant only when there is a dues of the bank then while paying the claim, the dues of the bank has to be satisfied first. This complaint has been filed on the allegation that there is a deficiency in service on the part of Insurer in not paying the claim. For deciding this issue, the bank is neither necessary party, nor proper party in the complaint. If the payment of claim is required to be made then there is nothing obstacle for the Insurer to satisfy the dues of the bank first, even if the order is made for making payment of the claim to the complainant by this Commission as such there is no defect of non-joinder of necessary party. (Paras 7 to 16)

Result: Complaint Allowed.