United India Insurance Company Limited vs SARAO GRAM UDYOG SAMITI REGISTERED

THIS appeal is by the United India Insurance Company Ltd. and challenge is to the order of District Forum, Fatehgarh Sahib dated November 11, 1997. Vide this order, complaint filed by Sarao Gram Udyog Samiti, an owner of Paper Board Factory was allowed and direction was given to appellant Insurance Company to pay a sum of Rs. 50,123/-, loss suffered as assessed by the Surveyor to the complainant alongwith 15% p.a. interest thereon w.e.f. February 1, 1997 till payment. A sum of Rs. 500/- was also allowed.

SINCE most of the facts are not disputed as arising out of pleadings of the parties, they are summarised. The complainant Samiti is a registered society running a Paper Board Mill. They had obtained an insurance policy from United India Insurance Company covering risk of loss to the building, machinery and raw material lying at the Mill premises. During the currency of the policy, fire occurred on October 31, 1996 when a tempo owned by Charanjit Singh came to the factory loaded with waste paper. A spark from its silencer caused fire to the waste material lying in the factory premises. A claim was made before the Insurance Company which was repudiated after Surveyor had assessed the loss. This led the complainant to move the District Forum. Plea was taken by the Insurance Company that the complaint was not maintainable as the same lay before Motor Accident Claims Tribunal as the fire occurred in the use of motor vehicle. The Insurance Company with whom the tempo was insured was not impleaded as a party. The goods were lying outside the factory premises in open and thus, were not covered under the Insurance Policy. After both the parties produced their evidence on affidavits and documents, the impugned order was passed holding the repudiation to be arbitrary and granting the loss as assessed by the Surveyor as stated above. Learned Counsel for the appellant Insurance Company after referring to the insurance policy (Annexure A-17) has argued that the place where stocks were lying is in open and was not bounded by any boundary wall and such stocks lying in open were not covered under the insurance policy and the claim was rightly repudiated. Reference has also been made to the report of Surveyor (Annexure R-27) in this respect. The Surveyor reported therein that there was no boundary wall of the Mill and the raw material i.e. paddy waste, waste paper were kept outside in the open in the east of the Mill. Since stocks were lying in open, according to the Surveyor, the same were not covered under the insurance policy. After hearing Counsel for the parties, we find that there is no force in the contention of Counsel for the Insurance Company. The perusal of insurance policy indicates that stocks lying at the Mill were covered. The Paper Board Mill as such was not defined or clarified and thus, it is to be taken that the open place attached with the Mill is also part of the Mill. The open place cannot be considered as separate from the premises of the Mill. Had there been a boundary wall, it can be said that the Mill was bounded by it, but in the absence of any boundary wall, the open land of the Mill sorrounding it would be premises of the Mill as such. It will not be out of place to mention here that for the subsequent year, policy (Annexure A-18) was issued covering risk of such material even lying in the open. This would further strengthen the view as expressed above that the open place of this Mill, for which now insurance policy has been issued covering risk, is part of the Mill. This and the previous policy would, thus, cover the risk of goods stored in open which are also premises of the Mill.

The other contention of learned Counsel for the appellant is that jurisdiction lay before the Motor Accident Claims Tribunal and not before the Fora. This contention is again devoid of merit. Section 3 of the Consumer Protection Act which is to the effect that the provisions of this Act are in addition to and not in derogation of the provisions of any other law in force. When additional remedy is provided under the Consumer Protection Act, it cannot be said that the same cannot be availed because of availability of other remedies under General Law or any other Special Law, in the absence of any probation therein.

LASTLY it has been argued by learned Counsel for the appellant that grant of 15% interest is against the decision of Supreme Court. There is force in this contention. The Supreme Court in United India Insurance Company Ltd. v. M.K.J. Corporation, III (1996) CPJ 8 (SC), has held that against nationalised Insurance Companies, compensation by way of interest should not exceed 12% p.a. Thus, we hold that to this extent the order of the District Forum requires modification. For the reasons recorded above, this appeal is partly allowed. The order of the District Forum is modified. The Insurance Company would pay the amount of Rs. 50,123/- with 12% p.a. interest thereon w.e.f. February 1, 1997 till payment with the cost as awarded by District Forum. The complainant would also get cost of this appeal which is assessed at Rs. 500/-. Appeal partly allowed.