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Judgment
This first appeal has been filed by Messrs Precious Minerals and Smelting Limited against the order dated 23.05.2016 of the State Consumer Disputes Redressal Commission, Chattisgarh (in short 'the State Commission') passed in CC/2015/26.
Brief facts of the case are that the appellant/complainant had taken a Contractor's Plant and Machinery Insurance Policy for its hydraulic Excavator machine and initially the policy was valid from 07.11.2007 to 06.11.2008 for a sum of Rs.36,12,000/-. The said policy was renewed from time to time and the last renewal was effected on 31.10.2012 for the period 03.11.2012 to 02.11.2013. The said excavator was burnt by the Naxalites at midnight between 30.11.2012 and 01.12.2012 while working at Lunia Khadan Bade Bacheli. The complainant got an estimate prepared for repairs and the same was for Rs.27,14,806/-. The insurance claim was submitted along with this estimate. The surveyor appointed by the Insurance Company assessed the loss and recommended Rs.19,61,161/- against the full and final settlement of the claim. The complainant also submitted its concurrence. However, the claim was repudiated by the Insurance Company on the ground that the premises covered under the insurance policy was industrial Estate, Jagdalpur, which is in Bastar District, whereas the accident has occurred at Lunia Khadan, which is in Dantewada District. The complainant then filed a complaint bearing No.CC/2015/26 before the State Commission.
The complaint was resisted by the Insurance Company on the ground mentioned in the repudiation letter. The State Commission vide its order dated 23.05.2016 dismissed the complaint on the ground that the place of accident was not covered under the policy.
Hence the present appeal.
Heard the learned counsel for the parties and perused the record.
Learned counsel for the appellant stated that machine was insured and not premises. The machine can be used at any place where the contractor will get work. The place mentioned under the column premises/work address is official address of the complainant. Obviously, there will be no work from the excavator machine at the address of the complainant. There is no such clause in the policy which prohibits use of machine at any other place. None of the exclusion clauses also mention about this provision that if this machine is used elsewhere, the claim would not be allowed. The Insurance Company had appointed a surveyor fully knowing the fact that the accident had occurred at a different place than the address mentioned against the column premises/work address. The surveyor has clearly recommended a sum of Rs.19,61,161/- and has also clearly stated that during his inspection he has not observed any breach in warrantees and conditions of the subject policy. Had this been the case, the surveyor, who must have dealt with such cases in large number, could have clearly observed that the claim was not maintainable on the ground of accident having occurred at a different place. It is true that surveyor report is not binding on the Insurance Company, however, surveyor is also supposed to know the basic principles of insurance and interpretation of the policy clauses.
Learned counsel for the appellant/complainant further stated that letter dated 16.09.2013 issued by the Senior Branch Manager of the opposite party Insurance Company Jagdalpur branch addressed to the complainant states that the claim was under processing and it was being considered for Rs.19,33,700/-. The Insurance Company has claimed that the insurance claim was repudiated by letter dated 18.09.2014. Though this letter was not received by the complainant as this seems to be a fake letter produced by the Insurance Company just to save their skin. As the surveyor has submitted its report on 16.12.2012 and the final report was submitted on 03.09.2013, Insurance Company had not taken any decision for a long time.
On the other hand, learned counsel for the respondent/opposite party stated that Insurance Company has every right to reject the report of the surveyor on valid reasons. In the present case, the machine was insured only for premises mentioned in the policy i.e. Natural Estate Jagdalpur, which is in Bastar District, whereas the accident has occurred at Lunia Khadan Bade Bacheli, which is in Dantewada District. Thus, the place of accident was not covered under the policy and the claim was accordingly repudiated inspite of a recommendation to settle the claim for Rs.19,33,700/- as full and final settlement. The Insurance Company has taken this ground in its written statement filed before the State Commission. It was further stated by the learned counsel that the complainant had not earlier challenged the receipt of the letter of repudiation as he is alleging now. No new ground can be taken at the appeal stage.
Learned counsel referred to judgment of Hon'ble Supreme Court in United India Insurance Co. Ltd. Vs. Orient Treasures Pvt. Ltd., I (2016) CPJ 6 (SC), wherein the stock kept outside the safe on display window was not considered as covered under the policy as the insurance covered during the night only the stock kept in safe. Learned counsel stated that the insured item kept at different place will not be covered under the policy. Similarly, decision of this Commission in Avon Organics Vs. New India Assurance Co. Ltd. & anr., I (2016) CPJ 40 (NC) was cited by the learned counsel to support the same argument.
Learned counsel further mentioned that he would also like to stress upon the judgment relied upon by the State Commission in the matter of M/s. Export Credit Guarantee Corporation of India Ltd. Vs. M/s. Garg Sons International, 2013 (4) CPR 373 (SC), wherein the Hon'ble Supreme Court has observed the following:-
"9. The insured cannot claim anything more than what is covered by the insurance policy.
"The terms of the contract have to be construed strictly, without altering the nature of the contract as the same may affect the interests of the parties adversely."
I have given a thoughtful consideration to the arguments advanced by the learned counsel for both the sides and examined the material on record. The premises/work address has been mentioned as "Industrial Estate, Jagdalpur" in the policy. The machine got damaged while at work at Lunia Khadan Bade Bacheli. The argument of the learned counsel for the Insurance Company is that the loss is only indemnifiable while machine would be working on the location specified in the policy or was at rest at that location. In this regard it is seen that the following condition of indemnification is mentioned in the policy:-
"THAT subject to the terms, exceptions, exclusions, provisions and conditions contained herein or endorsed herein, the company will at its own option by payment or reinstatement or repair indemnify the Insured against unforeseen and sudden physical damage by any cause not hereinafter excluded to any Insured Property specified in the attached Schedule(s) whilst at the location mentioned therein necessitating its immediate repair or replacement. This policy shall apply to the insured whether they are at work or at rest, or being dismantled for the purpose of cleaning or overhauling, or in the course of the aforesaid operation, themselves, or when being shifted within the premises, or during subsequent re-erection, but in any case only after successful commissioning. The liability of the Company for any one item of the insured property shall not exceed in the aggregate in any one period of Insurance the Sum Insured set against such item in the attached Schedule(s). However, the sum insured under such item can be reinstated occurrence of a claim for balance period."
From the above provision, it is clear that loss is indemnifiable if the damage happens at location mentioned in the schedule where the insured items are listed. In the present case, in the schedule, under the heading of location details "Industrial Area" is mentioned. It does not specify any particular industrial area. As no specific industrial area is mentioned against the location details in the schedule, strictly speaking the indemnification would be valid even if the excavator is used outside the Jagdalpur Industrial Estate. As the repudiation has been made only on the ground that the excavator was being used outside Jagdalpur Industrial Estate, the same does not seem to be valid as it is not necessary that the excavator should be used only in Jagdalpur Industrial Estate. Moreover, no information is available whether the place of accident is covered under some other industrial area. As the expression "Industrial Area" is not defined in the policy, the meaning can be extended to mean any area where any industry is there. Thus the place of accident can also be treated as mining industrial area within the expanded meaning. From this point of view, the loss is indemnifiable under the policy. However, the position is not so simple in the present case. The address/work location in the policy is mentioned as "Industrial Estate Jagdalpur" whereas in the schedule it is "Industrial Area". As per the indemnification clause of the policy, it is the location mentioned in the schedule that is to be considered. From this point of view, the loss seems to be indemnifiable. However, in respect of the place of accident, it is not clear whether the accident took place in any industrial area or not. So, if the place of accident is not covered under any industrial area, the condition relating to location may be considered as violated and in that case also, this violation is not breach of any fundamental condition of the policy because the excavator was being used for mining work which is not unusual and the same was burnt by Naxalite at the work place, therefore, the loss is genuine. As excavator is also in the category of vehicle, the claim can be settled on non-standard basis in the light of the decision of the Hon'ble Supreme Court in Amalendu Sahoo Vs. Oriental Insurance Co. Ltd., II (2010) CPJ 9 (SC) where the Apex Court has opined that even in cases where there is any breach of warranty/condition of policy, an amount upto 75% of the admissible claim can be agreed to. No condition is violated as it is not necessary that the excavator should only be working at Jagdalpur Industrial Estate and also the policy has to be interpreted in terms of its terms and conditions which also are to be interpreted as they are.
It is seen that in the present case the location stated in the policy is of the office of the appellant whereas an excavator would definitely be used outside the office area of the insured. However, neither the appellant nor the Insurance Company has given attention to this aspect while filing the proposal form or while issuing the policy. The proposal form is not available on record and hence the correct position in this regard cannot be verified.
Consequently, I deem it appropriate to partly allow the first appeal no.748 of 2016 by directing the opposite party/appellant to pay 60% of the amount assessed by the surveyor i.e. Rs.11,76,697 (60% of Rs.19,61,161/-) to the complainant along with 6% interest from the date of filing of the complaint till actual realisation. As a consequence of acceptance of the appeal, the order dated 23.05.2016 of the State Commission is set aside. This order be complied with by the appellant/opposite party within 45 days of receipt/service of this order. Parties to bear their own costs.