CONSUMER DISPUTES REDRESSAL FORUM – X
GOVERNMENT OF N.C.T. OF DELHI
Udyog Sadan, C – 22 & 23, Institutional Area
(Behind Qutub Hotel)
New Delhi – 110 016
Case No.630/2010
M/S RATHI STEEL & POWER LTD.
A-3 INDUSTRIAL AREA, SOUTH OF G.T. ROAD,
GHAZIABAD-201009, UTTAR PRADESH
…………. COMPLAINANT
Vs.
M/S RELIANCE GENERAL INSURANCE CO. LTD.,
570, RECTIFIER HOUSE, NAIGAUM CROSS ROAD,
WADALA-WEST, MUMBAI
REGIONAL OFFICE AT:-
60, OKHLA INDUSTRIAL ESTATE,
2ND FLOOR, PHASE-3, NEW DELHI-110020
ALSO AT:-
K-24 & 25, MEZZANINE FLOOR,
PERAL PLAZA, SECTOR-18, NOIDA-201301
…………..RESPONDENT
Date of Order:07.01.2019
O R D E R
A.S. Yadav - President
The complainant, M/s Rathi Steel & Power Ltd., has filed the present complaint under Section 12 of the Consumer Protection Act, 1986, against M/s Reliance General Insurance Company Ltd., hereinafter referred to as the OP, submitting that the complainant is a company incorporated under the Companies Act, and is engaged in the business of manufacture and sale of steel, and the OP is also a company registered under the Companies Act and engaged in the business of insurance, having their regional office in Delhi. It is submitted that the complainant approached the OP for issuance of Marine Insurance Policy for all the purchases like raw material, consumable and finished goods, sponge iron and steel billets and submitted a proposal form to the OP for the period 01.01.2009 to 31.12.2009, for voyage inland transit from anywhere in India to factory at Sambalpur, Orissa and from the said factory to anywhere in India by Rail/Road transport, for coverage of all risks including spontaneous combustion and SRCC, wherefor the complainant had to provide monthly sales declaration, and the premium was Rs.2,10,676/- was paid vide cheque no.790616 dated 30.12.2008 which was inclusive of the service tax and stamp duty. It is stated that the complainant had specifically requested the OP to issue the insurance coverage strictly in accordance with the proposal form. The OP accepted the proposal of the complainant for declaration of monthly sales and issued the marine policy no.1302392411100004 for a total sum insured of Rs.46,87,50,000/-, which was further enhanced at the request of the complainant, to Rs.98,06,50,000/-. It is submitted that the complainant was regularly issuing the monthly sales declaration which were duly accepted by the OP without any verification.
It is further stated that on 04.02.2009 Iron Ore (5-18) mm quantity of 3846.100 MT was loaded at Essel Railay Siding vide invoice No.RSML/EMS/5/0809 dated 07.02.2009 by Essel Mining & Industries Ltd. (EMIL), Barbil, Keonghar, Orissa to Hirakud through Railway RR No.212000018 to complainant’s site at Rathi Steel Power Ltd., Sambalpur. On request of the complainant, the Kalyani Laboratories did sampling supervision during the said loading in the wagons at EMI Railway Siding. The said loading was also supervised by Inspectorate Griffith India Pvt. Ltd. who issued the certificate dated 07.02.2009 for weight and quality with respect to 3846.100 MT Iron Ore. The complainant took delivery of the consignment from the Railway and noticed that there was short delivery by 190.39 MT of Iron Ore out of the total loaded consignment. The Padmawati Logistics transporter received complete Iron Ore from the entire rake consignment of 59 Wagon, arrived on 06.02.2009 at Hirakud Railway Station for the transportation/shifting to the Plant site at Sambalpur.
It is further stated that the complainant lodged claim with the OP Insurance Company for an amount of Rs.8,18,705/- on account of loss sustained due to non-delivery of 190.39 MT of Iron Ore, which are squarely covered under the policy coverage provided to the complainant. The OP thereafter appointed M/s S.K. Dass & Associates Insurance Surveyor & Loss Assessor to assess the loss sustained by the complainant. The complainant submitted all the documents which were available with them to the Surveyor. However, the OP vide letter dated 30.04.2009 repudiated the claim of the complainant on the alleged ground that the said loss due to shortage falls under exclusion clause of the said insurance coverage, which is incorrect and contrary to the terms of the policy. It is submitted that as per the exclusion clause, the shortage due to trade loss which are unexplained are excluded. In view thereof, on 11.05.2010 the complainant got issued the legal notice to the OP once again calling upon them to make the payment of Rs.8,18,705/- alongwith interest @ 18% p.a. The complainant has prayed that OP be directed to pay a sum of Rs.8,18,705/- to the complainant alongwith interest and also pay Rs.10 lakhs towards compensation.
OP in reply took the plea that the complainant is not a consumer as the complainant had availed the insurance cover for commercial purpose. The present complaint is beyond pecuniary jurisdiction. It is not disputed that OP had issued the aforesaid insurance policy in the name of the complainant for the period from 01.01.2009 to 31.12.2009. It is also not disputed that the complainant has lodged alleged a claim with OP on 14.02.2009 for an amount of Rs.8,18,705/- on account of alleged loss sustained due to non-delivery of 190.39 MT of Iron Ore. On receipt of the claim, OP deputed an independent IRDA accredited surveyor, S.K. Das & Associates to survey and assess the claim. The surveyor wrote letters to the complainant to furnish the necessary documents which were furnished by the complainant in piecemeal. Thereafter the surveyor submitted a report dated 17.04.2009 to OP. It was found that the loss of the above-mentioned quantity of Iron-Ore occurred due to either or combination of spillage during transit/transshipment/unloading/loading and weightment difference etc. Since the Insurance Policy specifically excludes loss due to shortage, OP rejected the claim of the complainant and vide its letter dated 30.04.2009 intimated the same to the complainant. It is stated that there was no deficiency in service on the part of OP. It is prayed that the complaint be dismissed.
We have gone through the case file carefully.
So far as the submission of OP that the complainant is not a consumer is concerned, it is appropriate to refer to the case of M/s Harsolia Motors Vs M/s National Insurance Co. Ltd. – 1 (2005) CPJ 27(NC) - where it was held that hiring of services of insurance company by insured, who are carrying on commercial activities, cannot be held to be for commercial purpose…………. Hence the complainant is a consumer.
The complaint is within the pecuniary jurisdiction. The complainant has claimed that he suffered a loss of Rs.8,18,705/-on account of supply of less quantity of Iron Ore. He has claimed this amount alongwith interest @ 24% p.a. as well as compensation of Rs.10 lakhs. What he has claimed does not matter because ultimately this forum has to decide how much interest and compensation has to be paid/awarded.
Clause 2 of the policy provides exclusions which are detailed as under:-
“Exclusions
- In no case shall this insurance cover
- loss damage or expense attributable to willful misconduct of the assured.
- ordinary leakage, ordinary loss in weight or volume, or ordinary wear and tear of the subject-matter insured.
- loss damage or expense caused by insufficiency or unsuitability of packing or preparation of the subject-matter insured (for the purpose of this Clause 2.3 “packing” shall be deemed to include stowage in a container or liftvan but only when such stowage is carried out prior to attachment of this insurance or by the Assured or their servants).
- loss damage or expense proximately caused by delay even though the delay be caused by a risk insured against.
- loss damage or expense caused by inherent vice or nature of the subject-matter insured.”
Now it is to be seen whether short delivery of 190.39 MT of Iron Ore amounts to loss under exclusion clause. The surveyor has come to the conclusion that the cause of shortage of Iron Ore could be either or combination of spillage during transit/transshipment/unloading/loading and weighment difference etc. The report itself shows that it was merely a guess report given by the surveyor to favour the insurance company and to justify the loss. There is no evidence that there was any leakage. The surveyor has not supported his report with a cogent evidence to show that shortage was on account of spillage. There is no iota of evidence on record that it was on account of spillage. The loss sustained by the complainant is definitely not covered under the exclusion clause. OP was not justified in rejecting the claim. The entire action of OP tantamounts to deficiency in service.
OP is directed to pay a sum of Rs.8,18,705/- to the complainant alongwith interest @ 9% p.a. from 01.05.2009 (as the claim was repudiated vide letter dated 30.04.2009) till the payment is made. OP is further directed to pay Rs.15,000/- towards compensation and Rs.5,000/- towards litigation expenses.
Let the order be complied within one month of the receipt thereof. The complaint stands disposed of accordingly.
Copy of order be sent to the parties, free of cost, and thereafter file be consigned to record room.
(H.C. SURI) (A.S. YADAV)
MEMBER PRESIDENT
