Gas Cylinder Insurance Policy

Victim of LPG Blast? Read more for compensation

At Power to Consumer, we come across multiple cases of lpg blast incidents and the victims approach us to seek compensation. We’d like to present a court order issued in 10.01.2006 by the SCDRC, Mahrarashtra between a LPG Company and a hapless victim (Kaluraj Jasraj Vyas & Others). If you know of anyone who has been a victim of LPG blast, please don’t hesitate to reach out to us by logging onto our website www.powertoconsumer.in

 

NCDRC
NEW DELHI
(CIRCUIT BENCH AT PUNE, MAHARASHTRA)

FIRST APPEAL NO. 196 OF 2006
(From the order dated 10.01.06 in Complaint No.217/1999 of the State Commission, Maharashtra)

New India Assurance Co. Ltd. …. Appellant

Vs.

Kaluraj Jasraj Vyas & Ors. ….Respondents

BEFORE :-
HON’BLE MR. JUSTICE M.B. SHAH, PRESIDENT
MRS. RAJYALAKSHMI RAO, MEMBER

For the Appellant : Mr. Neeraj Singh, Advocate
For Mr. P.K. Seth, Advocate

For the Res. No. 1 : NEMO
For the Res.No. 2 : Mr. D.D. Shinde, Advocate
For Jagdish K. Vyas, Advocate
For the Res.No.3 : Mr. H.S. Aglawe, advocate
For the Re.No.4 : Mr. P.K. Belchada, Advocate

Dated 30th January, 2008

O R D E R

M.B.SHAH, J. PRESIDENT

Being aggrieved and dissatisfied by the judgement and order dated 10.1.2006 passed by the State Consumer Disputes Redressal Commission, Maharashtra in Complaint No. 217 of 1999, the New India Assurance Co. Ltd., (hereinafter referred to as the Insurance Company) has preferred this appeal.

By the impugned order, the State Commission arrived at the conclusion that because of the explosion of the gas cylinder, fire took place in complainant’s premises and caused damage to the building as well as furniture which was lying in the premises of the complainant. Information was sent to the dealer who in turn informed the Insurance Company as well as the Hindustan Petroleum Corporation Ltd. (hereinafter referred to as the HPCL.) Hence, the complaint was filed against the dealer, HPCL., and the Insurance Co.

After going through the evidence which was produced on record, the State Commission held that the dealer (Original Opponent No.1) had taken a Miscellaneous Accident Insurance Policy from the Insurance Company for the period from 27.4.1996 to 26.4.1997, for the coverage of the perils contemplated therein. Despite the service of notice, the Insurance Co. neither appointed surveyor nor gave any response.

Therefore, relying upon the survey report of Shri M.B.Nagarkar & Co., the State Commission assessed the loss at Rs.9,65,800/- and arrived at the conclusion that the Insurance Company is liable to pay the said amount, because of the insurance cover. It also observed that the dealer as well as the HPCL are not liable.

Against that order, the Insurance Co. has preferred this appeal.

As per the evidence which is brought on record, the gas cylinder exploded and, thereafter, fire caused extensive damage in the premises of the Complainant/customer of dealer. The explosion took place when the gas stove was sought to be lighted. The fire brigade was called and the fire was extinguished. However, due to fire there was extensive damage in the double storey building and shop where the material was stored. The Police prepared a spot panchnama. Talathi of village, Dhanori also prepared panchnama. The report was given by the fire brigade department to Pune Municipal Corporation and information was given by letter dated 21st May, 1996 by the Complainant to the dealer as well as the HPCL but the claim was not settled and the State Commission passed the aforesaid order.

On behalf of the appellant, it has been contended that as the gas cylinder was shifted from the customer’s premises to his shop building where the complainant was residing, the appellant is not liable to compensate the complainant.

In our view, the aforesaid contention cannot be accepted, because the Complainant was residing in the premises which was adjacent to the shop wherein he was doing his business.

Further, the Complainant has brought on record the report of Mr.M.B.Nagarkar & Co., who is also on the panel of the Insurance Company. The said report clearly indicates how the accident took place. The relevant part is as under:

“On 16th May, 1996, at about 12.45 hrs. there was explosion of the domestic gas cylinder in the House No. 30 of Mr. Kaluram Jasraj Vyas due to which the said house was entirely gutted in the fire. The fire spread on the surrounding area due to which the House No. 31 of Mr. Dattu Ganpat Parande, and House No. 32 of Mr. Kaluram Sadashiv Paraande were also affected. The fire could be extinguished completely at about 16.00 hrs. But during the period of about 3 hrs. and 15 minutes the said fire caused extensive damage to the buildings and the contents therein. Fortunately, there were no casualties. The Police Inspector, Vishrantwadi Police Station, had registered the case in the Fire Register under Sr. No. 1/96.

The Police had conducted the Panchanama on the same day at about 16.05 Hrs. various government officials like Circle Officer, Executive Engineer M.S.E.B., Asstt. Police Commissioner – Khadki area etc. had visited and conducted the inspection.

The matter was reported to Hindustan Petroleum Ltd., through it’s dealer M/s. Kekan LPG Corner, Yerawada, Pune – 411 032. Thereafter, the officers of the said company visited the spot and conducted the inspection”.

Thereafter, the Surveyors have assessed the loss by considering the details of the articles which were damaged. The list is exhaustive which is not required to be narrated here. They assessed the loss at Rs.9,65,800/-. They have also produced on record the photographs of building which was damaged.

Further, the opposite party No.1 (Dealer of LPG) has produced on record the Miscellaneous Accident Insurance Policy. The schedule to the policy provides limit of coverage under various sections. For our purpose the relevant section is Section VII, which is as under:

“Sec.VII
Public Liability (Geographical Area – within 25 KMs radius from the Insured Premises)
(maximum limit for AOA Rs.10,00,000/- Per policy period limit 4 times of AOA Limit.
AOA
AOY
3-00 on AOY plus 0-10
plus10,00,000 3000.00
(paise) on Turnover

That means, the maximum limit of insurance cover is for a sum of Rs.10 lakhs.

In the present case, there is no dispute that the fire took place in the premises of the customer of the insured within 7 kilometers from the dealer’s premises.

As per the aforesaid policy, under the Public Liability Clause the insurance company would be liable to reimburse the dealer, because dealer is required to reimburse the complainant.

However, the learned Counsel appearing on behalf of the insurance company referred to the terms and conditions of the policy, particularly of Section VII, which reads as under:

“The Company will indemnify the Insured in respect of all sums which the Insured is legally liable to pay as compensation and litigation expenses incurred by the Insured at the Company’s written consent in respect of accidental death or bodily injury to any person other than a person under the Insured’s service and Insured’s family members and / or accidental damage to property caused by or arising from the installation of gas filled liquefied petroleum gas cylinder in the premises of the Insured’s customers or whilst such cylinders from the Insured’s premises are in the course of being carried for installation in the premises of the Insured’s customers or whilst such empty cylinders are in the course of being carried from the premises of the Insured’s customers to the Insured’s premises*, not exceeding in all for the compensation and litigation expenses the limit of Rs. For any one accident or a series of accidents arising from any one event and Rs. For all accidents during any one period of insurance.
*and also whilst lying at the insured’s premises specified in the schedule.

On the basis of the said condition, the learned Counsel submitted that the Insurance Company is not liable in such a case.

In our view, referring to the aforesaid terms of the clause, it is apparently vague. However, it inter alia, specifically provides that the Insurance Company will indemnify the insured in respect of all sums which the insured is legally liable to pay as compensation in case of accidental damage to property caused by or arising from the installation of gas filled liquefied petroleum gas cylinder in the premises of the Insured’s customers.

Undisputedly, in the present case, the damage has taken place in the customer’s premises. In this view of the matter, it cannot be said that the order passed by the State Commission directing the Insurance Company to reimburse the Complainant is in any erroneous.

At the same time, it is to be stated that because of the defective cylinder or the regulator the accident has taken place, and hence, it cannot be held that the Dealer or the HPCL would not be liable. Primary liability would be that of the HPCL.

In this view of the matter, it is held that the dealer and the HPCL would be jointly and severally liable to pay compensation to the Complainant. However, as the insurance cover is taken by the dealer, the Insurance Company would be also liable. In the result, the appeal is partly allowed and the order passed by the State Commission is modified accordingly.

It is to be stated that at the time of admission hearing of this appeal, the Insurance Company was directed to deposit a sum of Rs.5 lakhs before the State Commission and permission was given to the Complainant to withdraw the same by furnishing adequate security to the satisfaction of the State Commission. It is stated that the said amount has been withdrawn by the Complainant.

In this view of the matter, it is directed that the remaining amount of Rs.4,65,800/- shall be paid jointly and severally by the dealer (Respondent no.3) and the HPCL (Respondent No.4) to the Complainant. However, the Insurance Company is also required to reimburse the said amount to the dealer. Therefore, the Insurance Company is directed to pay the remaining amount to the Complainant within a period of six weeks from today.

However, considering the facts of the case, the direction to pay interest on the sum assessed is set aside.

The appeal stands disposed of accordingly. There shall be no order as to costs.

Sd/xxxx
……………………………….J.
( M.B.SHAH )
PRESIDENT

Sd/xxxx
.…………………………………
(RAJYALAKSHMI RAO)
MEMBER