An insurer cannot arbitrarily repudiate a claim by disregarding consistent findings of its own appointed surveyors and technical experts. Rejection based on exclusion clauses requires cogent evidence, and failure to settle a claim after extensive, multi-year evaluation constitutes an actionable deficiency in service.

JUDGMENT

AVM JONNALAGADDA RAJENDRA, AVSM VSM - MEMBER

1. The present Consumer Complaint has been filed under Section 21 of the Consumer Protection Act, 1986 (for short “the Act”) against the Opposite Parties (OPs) seeking the following:

A. Hold the Respondents guilty of deficiency in service to its consumer;

B. Hold the Respondents guilty of unfair trade practice upon its consumer;

C. Hold that repudiation of genuine claim lodged for losses and damages suffered by complainant with respondents as wrong and direct the respondents to pay the claim amount of Rs.4,85,00,000/-(Rupees Four Crore Eighty Five Lakhs Only towards cost installation and transportation of the TG Stator and Rotor 25 MV to the Complainant;

D. Direct the respondents to pay the amount of Rs. 5 Crores as damages and compensation on account of mental pain. agony, sufferings, on account of suffrage because of time and money invested and for deficiency in services, delays, and lapses, unfair trade practice;

E. Award costs, expenses, travelling expenses, lawyers fee incurred in these proceedings and otherwise in connection to the Complainant which is computed at Rs. 25 Lakhs; and

F. Award interest at 18% p.a. from the date of claim till the date of payment;

G. Pass such other directions, orders and reliefs as this Commission may deem fit under the facts and circumstances of the case, in the interest of justice and equity.”

2. Brief facts of the case, as per the complaint, are that the complainant had been purchasing insurance policies from OPs through its Divisional Office–III for its integrated Steel Plant at Siltara, Raipur (C.G.). In continuation of the same, he obtained a Fire Industrial All Risk Policy bearing Policy No.191300/11/2014/67 for the period 18.05.2013 to 17.05.2014 from the OPs and the premium of Rs. 46,37,187 was paid. The sum insured under the said policy was Rs.540 Crores, covering the buildings, plant and machinery, electrical items and breakdown machinery. On 14.03.2014 at about 11:10 PM, while the power plant was in operation, loss occurred due to heavy flashing in the 25 MVA Turbo Generator Set installed in Unit-1. The loss was intimated to the OP by e-mail. This Turbo Generator was manufactured by BHEL, Hyderabad, and was of 31,250 KVA, 25,000 KW capacity. On receipt of the damage claim, the OP appointed Shri Ramesh Agrawal, an IRDA licensed surveyor, who conducted spot inspection on 24.03.2014 and submitted a preliminary survey report noting breakdown of the unit and stator earth fault. M/s BHEL, Hyderabad inspected the Turbo Generator on 24.03.2014 and the minutes of meeting were recorded, wherein the repair and rewinding of stator and rotor were proposed. The complainant’s technical team analysed the damage on 26.03.2014 and reported dislocation of a core strip causing puncture of stator coil insulation. M/s BHEL, Jabalpur, initially issued an offer on 27.03.2014 for repair and rewinding, and subsequently advised replacement of the stator due to GVPI manufacturing process. The options for supply of new stator and rotor were communicated by BHEL vide letter dated 25.04.2014. M/s Sanjay Dwivedi & Associates, who was appointed as final surveyor, had ascertained the damage and circumstances thereto and submitted the report d