CHHATTISGARH STATE CONSUMER DISPUTES REDRESSAL COMMISSION PANDRI, RAIPUR
Gautam Chourdiya, President and Pramod Kumar Varma, Member
In the Matter of: The Oriental
Insurance Company Limited – Appellant
versus
Preetpal Singh Pabiyal S/o.
Sardar Shri Ajit Singh – Respondent
Appeal No.FA/23/247
Decided on 15.4.2024

IMPORTANT POINT
Claim pending – Keeping a claim pending for such a long time without any decision clearly amounts to unfair trade practice on the part of the appellant/opposite party insurance company.

Headnote:

Consumer Protection Act, 2019 – Section 41 – Appeal – Services – Insurance – Repudiation of Claim – In the facts of the present case the appellant/opposite party insurance company has not decided the claim yet nor any intimation regarding their decision on the claim has been given to the respondent/complainant or after filing of complaint before the District Commission or to this Commission also. Keeping a claim pending for such a long time without any decision clearly amounts to unfair trade practice on the part of the appellant/opposite party insurance company – So far as quantum of award is concerned we do not find any error in the impugned as the same is based on the assessment of loss by the Surveyor of the insurance company and as the machine was being plied at different place without endorsement the claim was considered as non-standard basis – Thus, in the facts and circumstances of case commission was of the considered view that the appellant/opposite party was liable to make good the loss suffered by the respondent/complainant, Appeal dismissed. [Paras 8 to 21].

Held : Learned District Commission in the impugned order observed that intimation regarding change of location of insured machine was given by the complainant/ respondent but the insurer neither did any correspondence nor took any action regarding their approval or objection, hence they are responsible to indemnify the loss but as without approval the complainant/ respondent started using the insured machine at a different location, hence awarding 75% of the total assessed loss by the surveyor, on the basis of non-standard basis will be justified. Thus, the complaint was partly allowed with the directions as aforesaid in paragraph No.1.

Arguments heard on application I.A. No.01/2024 filed under order 41 rule 27 of CPC by the appellant along with copy of “All India Tariff on Contractor’s Plant and Machinery Insurance”.

Learned counsel for the appellant submitted that the “All India Tariff on Contractor’s Plant and Machinery Insurance” was issued by Tariff Advisory Committee in accordance with the provisions of Part II B of Insurance Act 1938, which is a statutory document and necessary for just and proper decision of the disputes involved in this matter, hence the application

be allowed and the document be taken on record.

We have considered the above arguments and gone through the document being filed along with the I.A. No.01/2024. The Tariff which is sought to be taken on record is statutory and appears to be decisive in this matter, hence the application I.A. No.01/2024 is allowed and the document filed along with the application is taken on record.

We have heard final arguments of all parties and perused the record. We have also gone through the written arguments submitted by both parties.

Learned counsel for the appellant in his written arguments as well as during oral arguments before us reiterating the defence taken by the insurance company in its written version before the District Commission has argued that learned District Commission has failed to appreciate that appellant/ opposite party was not liable to make good loss to the respondent/ complainant in respect of alleged accident took place in a different place than the location mentioned in the insurance policy, which is an area specific policy. The merely on the basis of alleged intimation dated 21.05.2019, without seeking proper endorsement with regard to change of location, it cannot be said that the respondent/ complainant had ever been authorized to use the insured excavator machine in a location other than the location mentioned in the policy. Learned District Commission also failed to appreciate that since the insurance company undertakes the risk subject to terms and conditions of the policy, therefore the terms and conditions subject to which the policy is issued, are required to be construed strictly.

Learned District Commission also failed to appreciate the settled legal position that mere delay in giving answer cannot be construed as an acceptance. The general rule is that the contract of insurance will be concluded only when the party to whom an offer has been made accepts it unconditionally and communicate his acceptance to the person making the offer. Learned District Commission also failed to appreciate that the proximate cause of loss was break-down which was not covered within the policy. Learned counsel for the appellant/ opposite party prayed that this appeal be allowed and the impugned order be set aside. In support of his arguments learned counsel for the appellant has placed reliance upon judgement of Hon’ble Apex Court in Life Insurance Corporation of India Vs. Raja Vasireddy Komalavalli Kamba & Ors., (1984) 2 SCC 719 and judgement of Hon’ble National Commission in IFFCO Tokio General Insurance Co. Ltd. Vs. Sai Construction & Anr., 2020 1 CPR (NC) 96; M/s. Keer Hotels Pvt. Ltd. Vs. Tata AIG General Insurance Co. Ltd., 2018 3 CPR (NC) 513.

Learned counsel for the respondent / complainant has also reiterated the averments made in the complaint and has supported the impugned order. He prayed that this appeal be dismissed. He has placed reliance upon judgement of Hon’ble Apex Court in Jaina Construction Co. Vs. The Oriental Insurance Co. Ltd. & Anr., Civil Appeal No.1069 of 2022, decided on 11.02.2022; Manjeet Singh Vs. National Insurance Co. Ltd. & Anr. 2018 NCJ 306 (SC); Gurshinder Singh Vs. Sriram General Insurance Co. Ltd. & Anr. Civil Appeal No.653 decided on 24.01.2020 and judgement of Hon’ble National Commission in National Insurance Co. Ltd. Vs. Sanjeev Kumar, 2018 NCJ 217 (NC) and Susheela Bai Pandey Vs. Branch Manager, The National Insurance Co. Ltd. & Anr. First Appeal No.468 of 2015 decided on 17.02.2020.

We have considered the above arguments advanced by both parties and perused the record. The main objection of the appellant / opposite party insurance company is that the policy in question was issued covering risk of the insured machine at a specific location whereas the location of the machine was changed without endorsement or approval of the insurance company. But intimation regarding change of location of the insured excavator machine was given by the respondent / complainant vide letter dated 21.05.2019 and receipt of which has been brought on record of the District Commission as Exhibit C-10. The incident of fire in the insured machine occurred on 24.06.2019 i.e. after about one month of intimation given by the respondent / complainant. The appellant / opposite party insurance company has not clearly stated that such intimation was received by them or not and if received then what was the action taken by them in that regard. Copy of not even a single correspondence has been filed to show their action taken on such intimation. In such a situation if the respondent / complainant after giving intimation proceeded to use the insured excavator machine at different location, it cannot be said that he breached the policy condition. It was the appellant / opposite party who remained idle for about one month even after receiving the intimation. Otherwise also it is not possible for a contractor to wait for such a long time without engaging the excavator to a work for earning, which was purchased with the help of finance provided by a financier and was required to pay EMI regularly.

Another defence of the appellant / opposite party is that the incident of fire occurred due to break-down which is out of purview of covered risk under the policy in question and in this regard the appellant/ opposite party has relied upon the version of the respondent/ complainant himself at different point of time. The Surveyor also gave his opinion on the basis of such version and the FIR. But in this regard an important document which is available on record as Exhibit C-9 is pertinent to mention here. This document is report dated 04.07.2019 of the Police Station In-charge of Samripath P.S. submitted before the Sub-divisional Magistrate, Kusmi Dist. Balrampur Ramanujganj (C.G.). In this report it has been mentioned that a Mechanical report of Mechanic Tahid Ali was obtained in which he opined that due to short-circuiting the fire broke-out in the machine. Such report was submitted enclosed with the report of the P.S. In-charge. This document Exhibit C-9 is sufficient to clear every cloud of doubt that the incident occurred due to short-circuit in the insured machine and not because of break-down. Thus, this defence that the incident occurred due to break-down of the vehicle, which was not covered is also not tenable.

So far as defence taken by the insurance company that the machine was left attended is concerned, it is not a case of theft and in the mechanical report also the cause of fire has been reported as short-circuit, which cannot have any nexus with the fact that the machine was left unattended. Hence in our considered view this issue is not germane. In this regard learned counsel for the respondent / complainant has placed reliance upon Sanjeev Kumar (supra)’s case in which it was held by the Hon’ble National Commission that if driver of vehicle violates any condition of policy then claim could be settled on non-standard basis. In the facts of the present case also the defence of the insurance company is that the driver left the machine unattended, hence the above principle settled by the Hon’ble National Commission is applicable in the facts of the present case also and claim needs to be allowed on non-standard basis.

In the facts of the present case the appellant/ opposite party insurance company has not decided the claim yet nor any intimation regarding their decision on the claim has been given to the respondent/ complainant or after filing of complaint before the District Commission or to this Commission also. Keeping a claim pending for such a long time without any decision clearly amounts to unfair trade practice on the part of the appellant / opposite party insurance company.

Learned counsel for the appellant / opposite party insurance company has relied upon judgement of Hon’ble Apex Court in Raja Vasireddy Komalavalii Kamba (supra) and argued that acceptance of new condition without express acceptance cannot be deemed and in contract of insurance, there cannot be acceptance by silence. In the facts of the present case intimation of change of place of insured machine was given about one month before the date of incident, but the insurance company remained idle about acceptance or rejection of risk at new place, hence decision of acceptance or rejection could not be waited for an inordinate time. This fact also has to be kept in mind that the machine was purchased with the help of finance provided by finance company and regular EMIs were required to be paid by the respondent / complainant and second the policy was issued only for one year and for about one month no decision could be taken by the appellant / opposite party regarding acceptance or rejection of change of place of risk. Learned counsel for the appellant has relied upon judgements of Hon’ble National Commission in Sai Construction (supra) and M/s. Keer Hotels Pvt. Ltd (supra)’s cases. But the facts of those case were different from the facts of the present case, hence are distinguishable. Learned counsel for the respondent has also relied upon various citations, but facts of those cases were different from the facts of the present case, hence are not applicable.

So far as quantum of award is concerned we do not find any error in the impugned as the same is based on the assessment of loss by the Surveyor of the insurance company and as the machine was being plied at different place without endorsement the claim was considered as non-standard basis. Hence, in the facts and circumstances of case we are of the considered view that the appellant / opposite party was liable to make good the loss suffered by the respondent / complainant and we do not find any reason to interfere with the impugned order.

Result: Appeal dismissed.