BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD.



F.A. 786/2006 against C.C. 122/2005, Dist. Forum-I, Hyderabad.



Between:



United India Insurance Company Ltd.

Rep. by its Divisional Manager

Divisional Office: 10-5-5/4,

Crystal Plaza, I & II Floor

Masabtank, Hyderabad. *** Appellant/

O.P.

And

E.R.S. Reddy

M/s. ESS ESS Constructions

Flat No. 402, Pent House

A-Block, Padma Colony

Nallakunta, Hyderabad-44. *** Respondent/

Complainant.



Counsel for the Appellant: Mr. R. Brizmohan Singh

Counsel for the Resp: M/s. M. Subrahmanyam.



F.A. 221/2008 against C.C. 122/2005, Dist. Forum-I, Hyderabad.



Between:



M/s. ESS ESS Constructions

Flat No. 402, Pent House

A-Block, Padma Colony

Nallakunta, Hyderabad-44

Rep. by its Managing Partner

E.R.S. Reddy . *** Appellant/

Complainant.

And



United India Insurance Company Ltd.

Rep. by its Divisional Manager

Divisional Office: 10-5-5/4,

Crystal Plaza, I & II Floor

Masabtank, Hyderabad. *** Respondent/

O.P.



Counsel for the Appellant: M/s. M. Subrahmanyam.

Counsel for the Resp: Mr. R. Brizmohan Singh



CORAM:

HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT.

&

SMT.M.SHREESHA, LADY MEMBER





MONDAY, THIS THE TWENTIETH DAY OF APRIL TWO THOUSAND NINE



ORAL ORDER: (Per Hon’ble Sri Justice D. Appa Rao, President)



***











1) These are cross-appeals one preferred by the complainant F.A. 221/2008 in refusing to award interest while the insurance company preferred F.A. 786/2006 against the very award directing to pay compensation under the policy.



2) The parties are described as arrayed in the complaint for felicity of expression.



3) The case of the complainant in brief is that it is a partnership firm doing contract works purchased Tatra Hemong Dumper for the purpose of contract works and insured it for Rs. 38 lakhs with the insurance company valid from 29.4.2003 to 28.4.2004. It entered into a sub-contract for execution of work wherein the entire machinery along with vehicle were sent to the main site. While so, on 28.5.2003 it met with accident while unloading the loose soil due to which the hydraulic cylinder slipped off, vehicle lost balance and got damaged. When the insurance company was informed, it sent its surveyor, who inspected on the next day, and noted the damaged parts. Later, it got it repaired through the very manufacturer by incurring expenditure of Rs. 6,67,934/-. It laid the claim along with bills. However, the same was repudiated on the ground that the vehicle was used elsewhere than in the insured premises. Alleging that it was unjust it filed the complaint claiming Rs. 6,67,934/- with interest @ 15% p.a.



4) The insurance company for the reasons best known did not choose to contest and therefore it was set-exparte.



5) The complainant in proof of its case filed the affidavit evidence of its Managing Partner and got Exs. A1 to A9 marked.









6) The Dist. Forum after considering the evidence placed on record opined that in view of the fact that the accident took place during the subsistence of the policy and in the light of surveyor report allowed the complaint partly directing the insurance company to pay Rs. 6,67,934/- with costs.



7) Aggrieved by the said decision the insurance company preferred F.A. 786/2006 contending that the Dist. Forum did not appreciate the facts in correct perspective. It ought to have seen that the terms of the policy do not cover the case on hand. It was used beyond its premises violating the terms. At any rate, the surveyor had assessed the loss at Rs. 5,38,900/-. From this amount, it ought to have deducted 33-1/3% and further deduction of 25%, and that at the most it was liable to pay Rs. 2,69,464/-.



8) The complainant equally filed F.A. 221/2008 alleging that the Dist. Forum ought to have allowed interest following the decision of the Supreme Court.



9) The points that arise for consideration are:

i) Whether the insurance company is liable to pay the amount claimed towards damage to the vehicle? If so, to what amount?



ii) Whether the complainant is entitled to interest?

















10) It is an undisputed fact that the complainant had taken Ex. A2 insurance policy covering the vehicle Tatra Hemang for Rs. 38 lakhs valid from 29.4.2003 to 28.4.2004. It is also not in dispute that the said vehicle met with accident on 28.5.2003 when it was attending to contract work at Gujarat during the subsistence of the policy. On receipt of information the insurance company appointed Sri Surendra N. Patel as Surveyor. He visited the place of accident, noted various damages caused to the vehicle vide his report Ex. A4. The complainant got the vehicle repaired by the very manufacturer spending an amount of Rs. 6,67,933.60 vide Ex. A5. The insurance company repudiated the claim by its letter Ex. A1 Dt. 24.6.2004. Contrarily now pleads at ground No. 2 that there was no repudiation and as such the order of the Dist. Forum is vitiated for absence of repudiation order. This is unfortunate. Obviously, the insurance company intends to repudiate on one ground or the other without even contesting the matter nor verifying the record.



11) The insurance company contends that it is not liable when the vehicle is being used elsewhere than in the insured premises referring to condition No. IMT 13 of the terms and conditions of the policy. It reads as follows :

IMT 13: Use of vehicle within insured’s own premises:

It is hereby understood and agreed that the insurer shall not be

Liable in respect of the vehicle insured while the vehicle is being

used elsewhere than in the insured’s premises except where the

vehicle is specifically required for a mission to fight a fire.



For the purpose of this endorsement “use confined to own premises”

Shall mean use only in the insured’s premises to which public have

no general right of access.















In fact the premises of the insured wherein the vehicle had to be used was not made a mention in Ex. A2. The contention that address of the insured was noted as Flat No. S2, Samata Nilayam, Plot No. 82, Srinagar Colony, Hyderabad, and therefore it could be treated as premises for has no meaning as it could not have been the premises wherein the dumper could be used. On the other hand under coloumn geographical area, it was mentioned India.



12) The very nature of the vehicle would undoubtedly show that it can be used only for loading and unloading the earth etc. In fact the insurance company drafted a surveyor when the complainant informed about the accident, who in turn confirmed the nature of the accident and the damage caused to the vehicle thereby. It is not known why this contention was taken as the very condition No. IMT 13 referred to above define the expression used “for the purpose of this endorsement “use confined to own premises” shall mean use only insured’s premises to which public have no general right of access. The surveyor who visited the spot did not say that the public have general right of access. The contract was executed at Lignite Mines, Rajpardi belonging to Gujarat Mineral Development Corporation Ltd. Therefore there is no violation of condition No. IMT 13. There is no clause wherein the complainant was prohibited from entering into sub-contract work. It is not illegal. Sub-leases are permitted under law. Unless there is positive prohibition to that effect, the just claim of the complainant cannot be negatived.

























13) Though it was alleged that 33-1/3% discount has to be allowed on own damage, as per endorsement No. 13 we do not come across such a stipulation. The learned counsel for the insurance company could not show where such restriction was imposed. Equally so with further deduction of 25%. In fact the surveyor did not mention these aspects while submitting his report under Ex. A4. He left it to the discretion of the authorities while informing about the damage. He confirmed the damage that was caused to the vehicle. The complainant could establish that he had spent Rs. 6,67,934/- evidenced under Ex. A5. He is entitled to the said amount. We do not see any mis-appreciation of fact or law by the Dist. Forum in this regard.



14) The complainant filed cross-appeal in not awarding interest on the ground that he had incurred amount and entitled to the same with interest as the repudiation was unjust. As we have observed the repudiation was unjust, and that the insurance company had taken a belated plea by way of appeal without even contesting the matter. The learned counsel for the complainant relied a decision in Ranawater Agarwal Vs. New India Assurance Co. Ltd. reported in 2005 (6) ALD 14 (NC) where interest was allowed from the date of filing of the complaint until the date on which payment was made. That was a case where cheque was received by the insured /complainant. However, it does not take note of interest payable. In that context it was held that interest ought to have been allowed from the date of complaint In the case on hand repudiation was made on 24.6.2004 for the accident that took place on 28.5.2003. We are of the opinion that interest could be awarded from the date of complaint. There is no reason why the complainant had waited though the repudiation was made on 24.6.2004. Therefore, we are of the opinion that interest could be awarded @ 12% p.a., from the date of complaint till the date of realization together with costs quantified at Rs. 2,000/- in the appeal.









15) In the result the appeal filed by the insurance company F.A. 786/2006 is dismissed. The appeal filed by the complainant F.A.221/2008 is allowed granting interest @ 12% p.a. from the date of complaint till the date of realization on the amount quantified by the Dist. Forum with costs computed at Rs. 2,000/- in the appeal. Time for compliance four weeks.







1) _______________________________

PRESIDENT





2) ________________________________

LADY MEMBER

Dt. 20. 04. 2009.