Judgment:
HONBLE M. THANIKACHALAM J, PRESIDENT
1. The Opposite Party in COP.31/2004 on the file of District Consumer Disputes Redressal Forum, Chennai (North), Chennai, is the appellant.
2. The complainant, who is running a business, in the name and style of Meta Films (India) Ltd., in order to insure the machineries, took a comprehensive policy called âStandard Fire and Special Perils Policyâ from the opposite party, covering the period from 09.07.2002 to 08.07.2003. On 30.10.2002 at about 2.00 a.m. fire broke out in the complainants factory, in which, some of the switches, ACB, Cables and other machines got burnt. On the day itself, a claim was lodged, on that basis, on 31.10.2002, a Surveyor was sent by the opposite party to assess the damage. On the very same day, without assigning any reason, the claim was rejected. Thereafter, further representation was made in writing as well telephonically. Though the complainant had insured the goods valued at Rs.6.5 crores and paid the premium alone Rs.1.30 lakhs, arbitrarily, indicating no reason, the claim was rejected. The conduct of the opposite party amounts to deficiency in service as well indulging in unfair trade practice. On the above basis, a direction was sought for, to pay a sum of Rs.85,000/- being loss caused by fire accident, a further sum of Rs.2 lakhs for the loss of business and for further sum of Rs.50,000/- as compensation.
3. The opposite party/appellant in his Written Version inter alia contended, that the complainant had informed the opposite party by fax, that the estimated damages would be around Rs.50,000/-, that the Surveyor have found and reported that all the damages which occurred due to the fire on 30.10.2002, fall under Clause 7 of the General Exclusions of the Standard Fire and Special Perils Policy and as such, they are not liable to pay any compensation, thereby, justifying their repudiation, praying for the dismissal of the complaint.
4. The trial forum elaborately considering the contention of the parties, Exclusion Clause and based upon certain judicial precedence, came to the conclusion, that the repudiation is not legally sound, that the insurance company is liable to compensate the damage caused to the complainants goods by fire, that by the deficiency in service, they have caused loss to the business also, in addition to, mental agony, resulting damage. Thus concluding, a direction came to be issued, to pay a sum of Rs.85,000/- being the loss caused to the article of the complainant, to pay a further sum of Rs.20,000/- as compensation for the loss of business by the complainant and further sum of Rs.5,000/- as compensation, in addition to, awarding a cost of Rs.1,000/-, giving time for payment, six weeks, failing which, imposing interest at 9% per annum, thereby, causing grievance to the opposite party, resulting this appeal.
5. Heard, the learned counsel appearing for either side, perused the documents, written submissions as well as the order of the District Forum.
6. Under Ex.A1-â Standard Fire and Special Perils Policyâ, the complainant insured his articles for the period, from 09.07.2002 to 08.07.2003, paying net premium of Rs.1,23,500/-, not in dispute. On 30.10.2002 as reported under Ex.A3, fire accident had taken place in the business premises of the complainant, in which, certain articles-machineries were destroyed. The complainant making claim, sent a fax also, wherein, he has approximately fixed the damage at Rs.50,000/- as seen from Ex.B1. Based upon the claim application-Ex.B2, admittedly, a Surveyor was nominated by the opposite party, inspected the premises and submitted a report which says âNet Adjusted Loss Rs.1,80,000/-â. While submitting the report, the Surveyor said that âthe claim is not to be admitted by the insurerâ. Based upon this report, the claim of the complainant appears to have been rejected, resulting, the complaint as said above. As far as the above facts are concerned, we find no dispute and the quantum assessed by the Surveyor was also not disputed before us.
7. The only submission made before us by the learned counsel for the appellant, is that the claim of complainant comes under General Exclusion Clause as per the policy, and therefore, they are not liable to answer the claim, which is opposed. By going through the provision in the policy and ascertain the meaning for the words used, we are of the view that the submission of the learned counsel for the appellant is unacceptable to us. To appreciate the Exclusion Clause, we are extracting the same as such, which reads â(A) GENERAL EXCLUSIONSâ; This policy does not cover loss, destruction or damage to any electrical machine, apparatus, fixture, or fitting arising from or occasioned by over-running, excessive pressure, short circuiting, arcing, self heating or leakage of electricity from whatever cause (lightning included) provided that this exclusion shall apply only to the particular electrical machine apparatus, fixture or fitting so affected and not to other machines, apparatus, fixtures or fittings which may be destroyed or damaged by fire so set upâ.
8. A careful reading of the above Clause would indicate that the Exclusion Clause is applicable only to the particular electrical machines or apparatus etc., but the same is not applicable to the entire damage, which can be seen from the words ânot to other machines, apparatus, fixtures or fittings which may be destroyed or damaged by fire so set upâ. Therefore, if at all applying the Exclusion Clause, the Insurance Company can deny the payment of compensation only to the machines or apparatus as the case may be, where the same was destroyed by itself due to excessive pressure, short-circuit, arcing, self heating etc., and not to other machines which were destroyed by the fire caused in the above said machines or apparatus. Therefore, generalizing that all the machines or apparatus have been destroyed by its own defect or short-circuiting, when it is not made out that other apparatus, had not caused the fire on its own, Insurance Company is not entitled to reject the total claim. Thus settling this position, now we have to see the cause of fire.
9. The Survey Report (Ex.B3) is not challenged. In this report, the Surveyor has stated that âthe fire got ignited due to arcing in the MV Panel Board. Due this arcing, the other machine card also damaged by short circuit arising out arcing. Hence, it was concluded as electrical short circuit in the MV Panel Boardâ. The above conclusion of the Surveyor Report would indicate that the short-circuit has arisen only in the Multi Voltage Panel Board, then spreading fire to other articles causing damage. As seen from Para 4 of the Surveyors Report, excluding the cost of MV Panel Board, it seems, amount is claimed and that is why in the complaint, a sum of Rs.85,000/- is claimed, though net assessed loss has been fixed at Rs.1,90,000/-. This assessment, according to the Surveyor, is given for notional purpose and not for settlement. The cost has worked out under the heading âSTATEMENT OF LOSSâ is not challenged. Therefore, taking into account the cause of fire and the fact, fire spread to other machineries also, we have no hesitation to come to the conclusion that the entire damage will not come within the exclusion clause and if at all where from short-circuit emanated alone will come under the Exclusion Clause. The trial forum considering the above facts and circumstances of the case, in our considered opinion, has rightly directed the opposite party to pay a sum of Rs.85,000/- being the loss caused to the articles of the complainant, in which, we are unable to find any irregularity or illegality warranting our interference. The approximate value informed by Fax will not preclude the complaint, from claiming the real value.
10. As far as the grant of compensation of Rs.20,000/- for the loss of the business by the complainant appears to be unwarranted and same is also against the terms and conditions of the policy. Under â(A) GENERAL EXCLUSIONS â Clause-9â --- âLoss of earnings, loss by delay, loss of market or other consequential or indirect loss or damage of any kind or description whatsoeverâ, is not covered by the Policy and therefore, this compensation of Rs.20,000/- has to be set aside.
11. The trial forum has granted a compensation of Rs.5,000/-, in which, we are unable to find any irregularity since the trial forum has granted nominal amount, though the complainant has claimed Rs.50,000/-, considering the delay caused by the Company. For the reasons stated supra, the appeal has to be allowed in part, with modification.
13. In the result, appeal is allowed in part, setting aside the compensation granted for the loss of business alone, confirming the rest of the order which directs to pay a sum of Rs.90,000/- (Rs.85,000/- + Rs.5,000/-). No order as cost in this appeal.