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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
R.K. Agrawal, President
Uttar Bharat Hydropower
Private Limited – Complainant
versus
Oriental Insurance Co. Ltd. and Anr. – Opp. Parties
Consumer Case No.1643 of 2018
Decided on 12 Dec 2022
Counsel for the Parties:
For the Complainant:Mr. G. Saikumar, Advocate, Ms. Sowmya Saikumar, Advocate
For the Opp. Parties:Mr. Vishnu Mehra, Advocate
IMPORTANT POINTS
(1) Material Damage - The Opposite Party Insurance Company should also appoint Surveyor to assess the Loss of Profit at the time of appointing the Surveyor to assess the Material Damage.
(2) Deemed generation - Deemed Generation is admissible to the Complainant Company.
(3) LOP - It was the duty of the Opposite Party Insurance Company to inspect the account books and calculate generation parameters at any time, so the plea of the Opposite Party that they were deprived of any opportunity to look into the Claim of Loss of Profit (LOP), does not hold any water.
Headnote:
Consumer Protection Act, 1986 – S.21(1)(a)(i)[Consumer Protection Act, 2019 – S.58(1)(a)(i)] – Services – Insurance – Repudiation of Claim - Loss of Profit - Business interruption – Appointment of Surveyor – At the time of assessment of LOP - Preliminary Objection regarding due to delayed intimation of the claim under Loss of Profit[LOP] - The Opposite Party Insurance Company appointed Surveyor on 18.07.2014 to assess the Material Damage. LOP is the consequential damage to Material Damage and the LOP under Section II of the Policy was payable only if loss destruction or Damage is indemnifiable under Section I of the Policy. The Opposite Party Insurance Company should also appoint Surveyor to assess the Loss of Profit at the time of appointing the Surveyor to assess the Material Damage on 18.07.2014 - It was the duty of the Opposite Party Insurance Company to inspect the account books and calculate generation parameters at any time, so the plea of the Opposite Party that they were deprived of any opportunity to look into the Claim of Loss of Profit (LOP), does not hold any water - Deemed Generation is admissible to the Complainant Company - Complainant had already handed over all the invoices and proof of receipt of payment from UPCL to the Surveyor vide letter dated 26.03.2018. In view of above, it is held that the Surveyor erred in not taking into consideration 3.5MW towards Deemed Generation while assessing the Loss under LOP and the Complainant is entitled for total capacity of the power plant, i.e., 10.5MW instead of 7MW while calculating claim for LOP - Complainant shall be entitled for LOP to Rs.9,07,40,624.88/-, Consumer Complaint is partly allowed and the Opposite Party Insurance Company is directed to pay a sum of Rs.6,34,342/, wrongly deducted by it towards settlement of Claim under ‘Material Damage’ and Rs.9,07,40,625/- (Rupees Nine Crore Seven Lakhs Forty Thousand and Six Hundred & Twenty Five only) towards Claim for Loss of Profit due to Business Interruption under Section II of the Policy, alongwith interest @12% p.a. [Paras 16 to 23].
Result: Complaint allowed.
ORDER
The present Consumer Complaint has been filed under Section 21(a)(1) of the Consumer Protection Act, 1986 (for short “the Act”) by Uttar Bharat Hydro Power Private Limited (hereinafter referred to as the ‘Complainant Company;) against Opposite Parties, i.e., Opposite Party No. 1 Oriental Insurance Company Limited (hereinafter referred to as Opposite Party Insurance Company) and Protocol Insurance Surveyors and Loss Assessors Private Limited, Opposite Party No. 2 (hereinafter referred to as Opposite Party Surveyor), alleging unfair and restrictive trade practice being adopted by Opposite Parties.
2. The brief facts of the case are that the Complainant Company is a Generating Company in terms of Electricity Act, 2003 and is engaged in the business of Electric Power Generation from Hydro Plant situated near Tehsil Kapkote, District Bageshwar, Uttrakhand. On 13.10.2011, Complainant Company executed a Power Purchase Agreement (for short “PPA”) with the Uttarakhand Power Corporation Limited (hereinafter referred to as ‘UPCL’) for sale of 10.5 MW power generated at the generating station at Tehsil Kapkote, District Bageshwar in the State of Uttarakhand. Under the PPA the tariff was to be determined by the Uttrakhand Electricity Regulatory Commission (UERC). On 02.04.2014, Complainant took an All Risk Policy bearing Policy No. 530000/11/2015/000003 from the Opposite Party Insurance Company after paying a sum of Rs.16,03,878/- towards Policy premium. The Policy was valid from 02.04.2014 till 01.04.2015. The Policy covers two risks, i.e., under Section I : Material Damage and Loss of Profit for business interruption as mentioned in Section II : Business Interruption, of the Policy, which reads as under:—
“The insurers agree that if during the period of insurance the business carried on by the insured at all the premises specified & listed in the Schedule is interrupted or interfered with in consequence of loss destruction or damage indemnifiable under Section I, then the Insurers shall indemnify the Insured for the amount of loss as hereinafter defined resulting from such interruption or interference provided that the liability of the Insurers in no case exceeds the total sum insured or such other sum as may hereinafter be substituted therefore by Endorsement signed by or on behalf of the Insurers.”
3. The Complainant Company had declared its commercial operation date (hereinafter referred to as COD) on 11.07.2014 and was being paid a tariff of Rs.4.57 per unit.
4. Unfortunately on 18.07.2014, the Project of the Complainant got submerged in water due to floods in the State of Uttarakhand and intimation was sent to the Opposite Party Insurance Company on 18.07.2014 itself. The Opposite Party Insurance Company through email dated 18.07.2014 appointed Protocol Insurance Surveyors & Loss Assessors Private Limited as the Surveyor, who submitted a Joint Inspection Report on 23.07.2014 agreeing to the fact that the Project got submerged into water due to continuous rain from 15.07.2014 till 18.07.2014 thereby causing flash flood.
5. The Surveyor submitted Final Survey Report No. 1 dated 29.01.2015, to Insurance Company estimating net liability of the Opposite Party Insurance Company to the tune of Rs.1,24,67,438/- towards Material damage.
6. The Opposite Party Insurance Company accepted the Report of the Surveyor on Material Damage under the Policy and remitted Rs.1,19,03,484/- to the Complainant on 05.05.2016, however sought refund of Rs.70,388/- as excess payment, which was paid back by the Complainant Company, meaning thereby, the Complainant had received Rs.1,18,33,096/- from the Opposite Party Insurance Company.
7. It may be mentioned here that as the Complainant Company had considered the tariff of Rs.4.57 per unit to be low, it filed a Petition before Uttarakhand Electricity Regulatory Commission (UERC) seeking determination
