IMPORTANT POINT
Insurance Policy – Machinery Breakdown Insurance Policy – Repudiation of Insurance policy – No clarity as to under which policy claim has been repudiated – Deficiency in service.

ORDER

Dr. Sadhna Shanker, Member.—This appeal has been filed under section 19 of the Consumer Protection Act, 1986 (hereinafter referred to as the ‘Act’) in challenge to the Order dated 19.04.2012 of the State Commission in complaint no.7 of 2010, whereby

the complaint of the complainant was dismissed.

2. We have heard the learned counsel for the appellant (hereinafter referred to as the ‘complainant company’) and the learned counsel for the respondent (hereinafter referred to as the ‘insurance company’) and perused the record including the State Commission’s impugned Order dated 19.04.2012 and the memorandum of appeal.

3. The brief facts of the case are that the complainant company had established a husk and coal based Power Plant having capacity of 14 MW, which commenced commercial production of power on 13.07.2007 and as per the statutory requirement, the complainant company had also installed at the aforesaid Power Plant an Electro Static Precipitator (ESP), as a pollution control measure, installed by M/s Thermax Babcock & Wilcon, Pimpri Pune, a renowned manufacturer of ESP. The function of the ESP is to separate dust and ash particles, contained in the smoke, which emitted while burning of coal and husk, through chimney. The complainant company had obtained a Machinery Breakdown Insurance Policy for the period from 12.07.2007 to 11.07.2008 covering 13 items including the ESP. The premium of Rs. 1,70,335/- was paid and the copy of the policy schedule along with money receipt and list of 13 items covered by the said insurance policy was issued but the terms and conditions of the policy was not issued. The policy was valid for the period from 12.7.2007 to 11.07.2008. It is alleged that on 13.02.2008, the ESP installed in the complainant company’s Power Plant suddenly broke down and stopped functioning in the midnight. The complainant company informed the insurance company as also the manufacturer of the ESP. An initial survey of the damaged ESP was carried out on 14.02.2008 in the presence of engineers of M/s Thermax Ltd. and it was found during survey that first and second field of the ESP had been extensively damaged due to accident, requiring at least 2-3 months’ time frame to complete replacement of collecting plates etc. It was also duly intimated to the insurance company in time. The complainant company had also received quotations from their suppliers and was in the process of placing orders for materials required for replacing the damaged parts of the ESP. The complainant intended to restart the Power Plant by using the 3rd field of the ESP because it was not practicable and viable to shutdown the plant for 2-3 months for want of materials required for replacement. Therefore, the plant was restarted after initial survey where it was found that the replacement of ESP will cost about 30 lakhs. On 10.09.2008 the insurance company sent a printed claim form, which was submitted along with necessary documents on 15.09.2008 in the office of the insurance company claiming thereby amount of Rs. 67,83,000/- under the subject Machinery Breakdown Insurance Policy. In the meantime, the complainant company had received the components for replacement of damaged parts and therefore, intimated to the insurance company on 16.07.2009 that plant would be shutdown for repairing of ESP on 19.07.2009. After completion of replacement of damaged parts, it was again intimated to the insurance company that the plant would be restarted on 04.08.2009 and the insurance company was called upon to send surveyor for final inspection of the ESP and thereafter final survey was carried out by Mr. N. K. Gupta, surveyor but his report was not furnished to the complainant despite repeated requests. It is alleged that the surveyor obtained signature of the complainant on several printed and typed papers and assured the complainant that their claim would be settled soon. But the insurance company vide letter dated 31.03.2010 repudiated the claim of the compla