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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
C. Viswanath, Presiding Member and Ram Surat Ram Maurya, Member
M/s. Rai Bahadur Narain Singh Sugar Mills Ltd. —Complainant
versus
United India Insurance Co. Ltd. —Opp. Party
Consumer Case No.90 of 2012
Decided on 9.2.2022
(A) Consumer Protection Act, 1986 – S. 21(a)(i) – [Consumer Protection Act, 2019 – S.58(1)(a)(i)] – Services – Insurance – Fire Accident – Complaint filed for alleged repudiation of claim by insurance company – Whether Compliant is not maintainable having complicated questions of law involved, which ought to be decided by Civil Court – The loss/damage caused to the turbine by fire is disputed by the Opposite Party. The claim of the Complainant is covered under the Insurance Policy is also disputed by the Opposite Party – Therefore, there is no complicated question of law involved in this case and the issue involved can very well be adjudicated by this Commission. The Complaint is, therefore, held to be maintainable. [Paras 10, 11].
(B) Consumer Protection Act, 1986 – S. 21(a)(i) – [Consumer Protection Act, 2019 – S.58(1)(a)(i)] – Services – Insurance – Fire Accident – Whether there was no direct damage to turbine due to fire accident – The Surveyor observed that “most probable cause of mechanical failure was the fire due to bursting of Lubricating Oil Pipe.” The Committee appointed by the Complainant observed that “huge quantity of spilled turbine oil lying on surface of turbine oil also caught fire and the flame flashed suddenly. Immediately the complete turbine was under flame for some time.” From the Final Survey Report and the report of the Committee appointed by the Complainant it is clear that the damage to the turbine was caused due to fire. The allegation of the Opposite Party that there was no direct damage to the turbine due to fire is, therefore, rejected. [Para 17].
(C) Consumer Protection Act, 1986 – S. 21(a)(i) – [Consumer Protection Act, 2019 – S.58(1)(a)(i)] – Services – Insurance – Fire Accident – Assessment of Compensation by Surveyor whether arbitrary – The turbine was functioning efficiently and the yearly depreciation should not be more than 5% per year. As per Survey Report dated 23.01.2010, the turbine purchased by the Complainant in 2005 was a second hand machine – If 5% per year depreciation is calculated from 1989 till 2008 (as the incident of fire occurred on 08.12.2008), the total depreciation for 17 years comes to 85%. However, the Surveyor made depreciation of 75%. The depreciation at 75% made by the Surveyor is accepted – Further, the salvage could be sold only for Rs.28.50 lakhs. The Complainant had calculated the salvage value of Stator and Rotor at Rs.3,39,696/- and Rs.9,51,600/- respectively – The Surveyor had given reason for calculation of salvage, which, in our opinion, is justified. The Surveyor had assessed the net loss at Rs.37,77,706/-. Complainant failed to establish that there is any arbitrariness in the assessment made by the Surveyor – Complaint is partly allowed, Opposite Party is directed to make payment of Rs.37,77,706/- alongwith 9% interest to the Complainant from the date of repudiation of the claim till the date of realization. [Paras 18 to 20].
Result: Compliant partly allowed.
ORDER
1. The present case is filed under Section 21(a) (1) of the Consumer Protection Act, 1986.
2. Case of the Complainant is that they obtained a Standard Fire and Special Perils Insurance Policy No.080500/11/08/110000049 from the Opposite Party by paying a premium of Rs.7,58,430/-. The Policy was valid from 16.05.2008 to 15.05.2009 and covered the risk to the plant & machinery for Rs.117 crores and factory building and office building for Rs.8 crores. The Insured property was also hypothecated with various Banks named in the Policy.
3. On 08.12.2008, at about 1 pm, during the trial of 10 MW turbine, suddenly lubrication oil pipe burst resulting in fire due to which the turbine was burnt. The Fire Brigade was called which controlled the fire after great effort. On 08.12.2008, the matter was also reported to the Police. The Opposite Party Insurance Company was informed of the incident, vide letter No.F/DGMF/5748 dated 08.12.2008, requesting them to depute a Surveyor at the earliest to assess the damage. The Opposite Party deputed M/s Mack Surveyor Pvt. Ltd. as Surveyor to assess the loss. The Surveyor visited the factory on 15.12.2008 and made enquiry and took photographs. On 16.12.2008, the Surveyor sent a letter to the Complainant to submit several documents. The Complainant complied with all the requirements of the Surveyor by furnishing the documents and information, vide letter dated 26.12.2008. According to the Complainant, the replacement cost of the turbine was around Rs.4 crores, but the Complainant submitted a rough estimate of Rs.1,22,00,000/- and claim form was accordingly filed by the Complainant with the Surveyor. On, 14.02.2009, the Complainant sent a letter to the Surveyor stating that as per the report of repairers the turbine was not in a repairable condition. In reply to the letter dated 14.02.2009, the Surveyor sent a letter dated 16.03.2009 to the Complainant that they did not agree with the Complainant.
4. On 13.04.2009, the Complainant appointed a Committee consisting of four Senior Engineers from operation, maintenance and technical specialist to look into the details of cause of damage to the turbine and informed the Surveyor, vide letter dated 25.05.2009. The said Committee submitted its report dated 01.06.2009 and a copy of the same was sent to the Surveyors on 06.06.2009. On 30.06.2009, the Complainant made detailed calculation of the loss and submitted the revised claim for Rs.2,01,70,501/-. The Surveyors recommend about Rs.40 lakhs towards the net amount of loss and asked the Complainant to consent to an amount of around Rs.40 lakhs so that immediate settlement of the claim could be made. The Surveyors did not disclose the basis of arriving at the amount of around Rs.40 lakhs.
5. On 13.09.2010, the Complainant sent a representation to the Insurance Regulatory and Development Authority, Hyderabad seeking their intervention in the matter. On 10.10.2010, the Complainant sent a letter to the Opposite Party seeking a copy of Surveyor Report, which was not provided to the Complainant. On 06.12.2010, the Complainant sent a legal notice to the Opposite Party, which was not replied by the Opposite Party. On 21.2.2011, the Opposite Party repudiated the claim. Alleging deficiency in service on the part of the Opposite Party, the Complainant filed the instant Consumer Complaint with following prayer:-
“1. A Sum of Rs.2,01,70,501/- being the value of the Turbine destroyed by the fire.
2. Interest @18% per annum on the said amount of Rs.2,01,70,501/- from 1.3.2009 up to the date of filing the complaint and thereafter up to the date of realization.
3. A sum of Rs.1,00,000/- towards harassment caused to the Complainant in entering into avoidable correspondence and consequent expenses.
4. A sum of Rs.1,00,000/- towards costs of this litigation.
5. Any other or further relief as this Hon’ble Commission finds fit and proper in the circumstances of the case.”
6. The Complaint was resisted by the Opposite Party
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