Oriental Insurance Co. Ltd vs Dr. Abhijit Purshottam Pathak

This appeal has been filed by the appellant Oriental Insurance Company Ltd. against the order dated 27.02.2017 of the State Consumer Disputes Redressal Commission, Maharashtra, (in short 'the State Commission') passed in CC No.01 of 2016.

Brief facts of the case are that the respondent/complainant got his medical equipment of Rs.2,75,00,000/- insured with the opposite party from 20.03.2015 to 19.03.2016. During the subsistence of the policy, part of the equipment (X-ray picture tube-performix 160A insert) got damaged. Claim was lodged with the Insurance Company and a surveyor was appointed. Surveyor assessed the loss at Rs.31,92,000/-. Opposite party/Insurance Company repudiated the claim on the ground that the damaged part was not covered under the insurance policy. The complainant preferred consumer complaint bearing No.01 of 2016 before the State Commission. The State Commission passed the following order on 27.02.2017:-

"1. Complaint is partly allowed as follows:

The opponent insurance company shall pay to the complainant insurance amount Rs.31,92,000/- (Rs.Thirty one lakhs ninety two thousand only) with 6% interest with effect from the date of complaint i.e. 18.12.2015 within one month from the date of receipt of copy of this judgment and order, else the complainant would be entitled to claim interest @9% p.a.

The opponent insurance company shall further pay to the complainant amount Rs.12,000/- (Rs. Twelve thousand only) towards cost of the complainant proceeding and bear its own cost.

Aggrieved with the order of the State Commission, the Insurance Company has filed this appeal.

Heard the learned counsel for the parties and perused the record. Learned counsel for the appellant stated that the State Commission has allowed the claim of the complainant against the conditions of the policy. As per special exclusion clause 1 tube is not covered under the policy and therefore damaged x-ray tube cannot be replaced under the policy. The surveyor has categorically stated in his report that this instrument, that is the X-ray tube has been damaged due to internal cause and not due to any outside cause therefore the tube is not covered under the policy as per special exclusion clause 1. Learned counsel further stated that State Commission has agreed with the assessment made by the surveyor but the State Commission has not fully accepted the report of the surveyor. The surveyor report is an important document which needs to be considered until there are cogent reasons for its rejection.

It was further pointed out by the learned counsel for the appellant that respondent/complainant is not a consumer as the complainant is running a big hospital where many employees are employed. The machine has also been purchased in the name of the hospital. Clearly, the machine was not purchased for earning livelihood by means of self-employment. Hence, the case of the complainant cannot be covered under the explanation attached to Section 2(1)(d) of the Consumer Protection Act, 1986. In support of his argument learned counsel referred to the following cases:-

"1. Dr. D. Rama Krishna Vs. the Managing Director Allengers Medical system Ltd., 2013 SCC ONLine NCDRC 270.

K.S. Dabas Vs. Rajinder Kumar Chhabra (Dr.), III (2007) CPJ 423 NC.

Laxmi Engineering Works Vs. P.S.G. Industrial Institute, (1995) 3 SCC 583"

On the other hand the learned counsel for the respondent complainant stated that it is a matter of insurance and all insurance cases can be dealt by this Commission. The learned counsel further argued that the whole machine was insured and the machine was inspected by the officers of the insurance company before issuing the policy. The x-ray tube is also included in the insurance. The mention of tube in the exclusion clause cannot be taken to be the x-ray tube. The tube mentioned in the exclusion clause is to be seen in the category of bulbs, valves, fuses, ribbons etc., therefore, the damaged x-ray tube cannot be considered as a tube mentioned in exclusion clause. The State Commission has considered all these points and has passed a reasonable order. It was insisted by the learned counsel that if there is any ambiguity in respect of any word or clause of the policy it has to be interpreted in favour of the insured. In support of his arguments, learned counsel referred to the following judgments:-

"1. United India Insurance Co. Ltd. Vs. Pushpalaya Printers, I (1998) CPJ 5 (NC)

Vice-Chairman A.P. Housing Board & Ors. Vs. A.P. Housing Board (LIG) Housing Beneficiaries Association , I (1998) CPJ 7 (NC)

P. Srinivasulu Chetty son of Chengalraya Chetty Vs. Diners Club International its DCR Manager and New India Insurance Co. Ltd. through its Senior Division Manager, MANU/CF/0112/2010

Industrial Promotion and Investment Corporation of Orissa Ltd. Vs. New India Assurance company Ltd. & anr., (2016) 15 SCC 315."

I have considered the arguments advanced by the learned counsel for both the parties and have examined the material on record. This Commission in Harsolia Motors Vs. National Insurance Co. Ltd. [I (2005) CPJ 27 (NC)] has held as follows:-

"16. Further, what is commercial purpose is discussed by the Apex Court in various decisions.

We would refer to few relevant judgments:

In Regional Provident Fund Commissioner Vs. Shiv Kumar Joshi, (2000) 1 SCC 98, the Court elaborately considered the provisions of Sections 2(1)(d) and 2(1)(o) as well as earlier decisions and held that The combined reading of the definitions of consumer and service under the Act and looking at the aims and object for which the Act was enacted, it is imperative that the words consumer and service as defined under the Act should be construed to comprehend consumer and services of commercial and trade-oriented nature only. Thus any person who is found to have hired services for consideration shall be deemed to be a consumer notwithstanding that the services were in connection with any goods or their user. Such services may be for any connected commercial activity and may also relate to the services as indicated in Section 2(1)(o) of the Act.

The aforesaid ratio makes it abundantly clear that services may be for any connected commercial activity, yet it would be within the purview of the Act.

Further, from the aforesaid discussion, it is apparent that even taking wide meaning of the words for any commercial purpose it would mean that goods purchased or services hired should be used in any activity directly intended to generate profit. Profit is the main aim of commercial purpose. But, in a case where goods purchased or services hired in an activity which is not directly intended to generate profit, it would not be commercial purpose."

On the basis of the above judgment this Commission is considering all matters relating to insurance and therefore, the present complaint is also maintainable under the provisions of Consumer Protection Act, 1986. Thus, the complainant is a consumer so far as the present case is concerned.

It is seen that the State Commission has observed the following:-

"11. On perusal of copy of insurance policy as well as the details of the undisputed machine in question shown by surveyor Shri Vinod Dapse in his report, we find much force in the submission of Shri Gholap learned counsel of the complainant. Because the damaged part of the machine viz.performix-160A Insert and performix-160A casing is an internal part of the machine which constitutes x-ray tube. This is also explicit from the diagrams of the part of the machine in question which are produced at EXh-Q. Whereas Special Exclusion Clause-I of the Insurance policy indicates the word "Tube' and not x-ray tube. It also include bulbs, valves, tubes, fuses, wires, chain, rubber tyre etc. Therefore, it is submitted by learned counsel for the complainant that word 'tube' from the Special Exclusion Clause-I carry the same meaning as word 'bulb', valves, bells etc. Considering the undisputed facts that the x-ray tube is an internal part of the machine in question, we have not hesitation to accept the argument advanced by Shri. Gholap learned counsel appearing for the complainant. But it appears from the defense of the opponent that it intends to take undue advantage of exclusion clause in which word 'tube' is included. Therefore we are unable to accept the argument advanced by Shri Mugdiya learned counsel appearing for the opponent."

I agree with the observations made by the State Commission with respect to the special clause 1 of the policy. The Special Exclusion clause reads as under:-

"Special Exclusion to Section I

The Company shall, not however, be liable for-

i) loss of or damage to bulbs, valves, tubes, ribbons, fuses, seals, belts, wires, chains, rubber tyres, exchangeable tools, engraved cylinders, objects made of glass, porcelain or ceramics sieves or fabrics, or any operating media (e.g. lubricating oil, fuel, chemicals);"

From the above it seems that the company wanted to avoid indemnification of small items like bulbs, valves, fuses and in that category tubes have also been included. Clearly these cannot be very costly items, something like x-ray tube in the present case. Moreover, if there is any ambiguity in any clause or any word used in the policy then the same needs to be interpreted against the insurance company and in favour of the insured as held by the Hon'ble Supreme Court in United India Insurance Co. Ltd. Vs. Pushpalaya Printers, 2004 CTJ 421 (Supreme Court) (CP) as under:-

"6. ........ It is also settled position in law that if there is any ambiguity or a term is capable of two possible interpretations one beneficial to the insured should be accepted consistent with the purpose for which the policy is taken, namely, to cover the risk on the happening of certain event. Although there is no ambiguity in the expression "impact", even otherwise applying the rule of contra proferentem, the use of the word "impact" in Clause 5 in the instant policy must be construed against the appellant. Where the words of a document are ambiguous, they shall be construed against the party who prepared the document. This rule applies to contract of insurance and Clause 5 of the insurance policy even after reading the entire policy in the present case should be construed against the insurer. A Constitution Bench of this Court in General Assurance Society Ltd. V. Chandumull Jain & Anr. 1966 (3) SCR 500, has expressed that "in a contract of insurance, there is requirement of uberrima fides i.e. good faith on the part of the assured and the contract is likely to be construed contra proferentem i.e. against the company in case of ambiguity or doubt."

On the basis of the above discussion, I do not find any merit in the appeal and the same is dismissed. The appellant Oriental Insurance Company is directed to pay Rs.31,92,000/- to the complainant along with 6% interest as ordered by the State Commission from the date of filing of the complaint, i.e from 18.12.2015 till realisation. The order be complied within a period of 45 days from the date of receipt/ service of this order.