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2023 Supreme(Online)(Guj) 1311
GUJARAT STATE CONSUMER DISPUTES REDRESSAL COMMISSION, AHMEDABAD
Not mentioned, Not mentioned
Mr. B.B. Maurya – Appellant
Versus
Opponent Insurance Company – Respondent
Complaint No. 43 of 2016
The insured must prove that loss falls within policy coverage; failure to establish causation leads to claim denial.
Headnote:(A) Insurance Act - Coverage and Claims - Erection All Risks / Storage Cum Erection Insurance Policy - Insured claimed loss due to power overloading resulting in damage to submersible pumps, amounting to Rs. 69,21,960. Insurer repudiated claim, citing defective workmanship as cause of loss, asserting no external cause covered under policy. Complainant's burden to establish that loss occurred due to insured perils not fulfilled. (Paras 7, 14)
(B) Burden of Proof - In insurance claims, the burden lies with the insured to prove that losses fell within the scope of coverage and were not a result of inherent defects. (Paras 9, 12)
Facts of the case:
A private limited company engaged in manufacturing submersible pumps claimed insurance compensation of Rs. 69,21,960 after three pumps damaged due to alleged power overloading. Insurance company denied the claim, attributing damages to defective workmanship. (Paras 1, 3)
Findings of Court:
The court found insufficient evidence provided by the complainant to justify the claim under the insurance policy. The manufacturer's defects and the lack of proof for external causation became pivotal for decision-making. (Paras 14)
Issues: The main issue addressed was whether the insured proved that damages were caused due to perils covered under the insurance policy or due to inherent defects in the pumps. (Paras 10, 14)
Ratio Decidendi: The court held that the complainant failed to adequately demonstrate that the cause of loss was due to power overloading, as required to establish liability under the insurance policy. As such, the insurer's repudiation of the claim was justified. (Paras 11, 14)
Result: Complaint dismissed for lack of sufficient evidence.
| Table of Content |
|---|
| 1. insurance claim details and background. (Para 1) |
| 2. responses from the insurance company regarding denial of claim. (Para 2 , 3) |
| 3. arguments from the complainant regarding claim validity. (Para 4 , 5) |
| 4. insurer's defense reliant on policy terms and conditions. (Para 6) |
| 5. court's examination of expert testimony and evidence. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13) |
| 6. final decision to dismiss the complaint. (Para 14) |
1. The Complainant herein has filed this complaint to claim compensation of Rs. 69,21,960 together with interest and cost. It is case of the complainant that complainant is Registered Private Limited Company under the Companies Act, and Mr. B.B. Maurya is authorized to file this complaint for and on behalf of complainant Company. The complainant Company is engaged in the business of manufacturing submersible pump and installation thereof. It is say of the complainant that the Deputy Engineer, Public Health and Chemical Division, Water and Drainage Supply Board of State of Gujarat (having its office at Surendranagar), invited tenders for the submersible pump wherein complainant was declared successful bidder and ordered to supply submersible pump which were numbered as serial no. 21842, 21843 and 21845 at Dudhrej Emergency Project. The total cost of these three pumps sets was around in Rs. 1,78,50,000 for which bills were issued. The complainant Company was given contract to operate and maintain the same for 36 months for the period from 27.12.2013 to 1.2.2018. To overcome unexpected breakdown and subsequent loss the Company purchased insurance policy to cover the risk for the submersible pumps. The opponent Insurance Company had issued policy no. 21040244130400000002. The policy copy is produced on record. It is say of the complainant that premiums were paid regularly and the copy of receipt thereof is also produced on record. The complainant averred that during October 2014, three submersible pumps were burnt due to electricity fault at Dudhrej site. On 15.10.2014, loss was reported to opponent Insurance Company with a request to depute surveyor to assess the loss. The complainant company thereafter, submitted claim form along with necessary documents, which substantiated the claim. The opponent Insurance Company appointed surveyor Mr. A.M. Patel, who visited site and asked complainant to supply certain documents. According to complainant, they have supplied all relevant information to surveyor and submitted all documents that were asked. The complainant company had inquired frequently for status of claim with the Insurance Company but there was no co - operation from the opponent insurer and therefore, the complainant appointed Government approved Valuer Mr. D.P. Jani, who is Chartered Engineer by profession and he had visited the Dudhrej site. The said Mr. Jani stated to have examined all three pump sets and found that the loss caused to due to power over loading and stated further that it is not because of any manufacturing fault. It is averred that after thorough investigation, Mr. Jani gave his opinion and issued a certificate that the complainant company had suffered loss of Rs. 23,07,320 for each pump. The complainant company has thereafter got it repaired and bills were raised and supplied to the opponent Insurance Company. The opponent Insurance Company had intimated insured that the surveyor has submitted his report and according to surveyor the cables and rotor surface of the submersible pumps were not proper and there was fault therein and therefore, the insurer is unable to indemnify the loss under the contract of insurance. The Insurance Company thus repudiated the claim. The complainant company had made repeated request to the opponent insurer to reconsider the same on the ground that before installation of the pumps, the Deputy Engineer of the Gujarat State Water Supply and Drainage Board had examined, tested it. According to complainant, it was joint inspection with WAPCOS Limited and
