State Consumer Disputes Redressal Commission
M/S Amba Shakti Ispat Ltd. vs Oriental Insurance Co. Ltd. & Ors. on 10 August, 2015
H.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
SHIMLA.
Consumer Complaint No.03/2015
Date of Presentation: 31.03.2015
Date of Decision: 10.08.2015
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M/s. Amba Shakti Ispat Limited,
(A Company incorporated under the Companies Act, 1956),
Having its Registered Office at 21/6, West Patel Nagar,
New Delhi-110 008 & its works at Plot No.6 & 6-A,
Kala Amb, Industrial Area-II, Kala Amb,
District Sirmour, H.P.-173 030,
Through Shri I.D. Aggarwal, son of late Shri G.R. Aggarwal,
R/o 419, Vashist Nagar, Ambala Cantt. (Haryana),
President Amba Shakti Ispat Limited, Plot No.6 & 6-A,
Industrial Area-II, Kala Amb, District Sirmour, H.P.-173 030
& Authorized Signatory of M/s. Amba Shakti Ispat Limited.
.......... Complainant.
Versus
(1) Oriental Insurance Company Limited,
Having its registered Office at
Oriental House, A-25/27, Asaf Ali Road,
New Delhi-110 002,
Through its Chairman-cum-Managing Director.
(2) Senior Manager,
Oriental Insurance Company Limited,
The Mall Nahan, District Sirmour, H.P.
(3) Manager,
Oriental Insurance Company Limited,
The Mall Nahan, District Sirmour, H.P.
(4) M/s. Sanjay Dwivedi,
Associates & Surveyor & Loss Assessor,
Office at III-A/135, Rachna Vaishali,
Ghaziabad-201 010.
.......... Opposite parties.
..................................................................................
Coram
Hon'ble Mr. Justice Surjit Singh, President.
Hon'ble Mrs. Prem Chauhan, Member.
Whether approved for reporting?1 Yes.
1
Whether Reporters of the local papers may be allowed to see the order?
M/s. Amba Shakti Ispat Ltd. Vs. Oriental Insurance Co. Ltd. & Ors.
(Consumer Complaint No.03/2015)
____________________________________________________________
For the Complainant: Mr. Rahul Mahajan, Advocate.
For Opposite Parties No.1 to 3: Mr. Bhupinder Pathania, Advocate.
For Opposite Party No.4: Ex-parte.
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O R D E R:
Justice Surjit Singh, President (Oral) Present complaint, under section 17 of the Consumer Protection Act, 1986, has been filed by M/s. Amba Shakti Ispat Limited, seeking directions to the opposite parties, i.e. Oriental Insurance Company Limited and its functionaries and Surveyor;
(a) to pay an amount of `72.00 lacs, on account of insurance money, with interest at the rate of 18% per annum, from the date of filing of complaint, to the date of payment of the said amount of money;
(b) to pay a sum of `7.00 lacs, on account of
compensation for mental torture,
harassment etc.; and
(c) to pay a sum of `1.00 lac, on account of
litigation expenses.
2. Complainant is a Company incorporated under the Companies Act, 1956, and its President Shri I.D. Aggarwal is authorized by the Board of Directors, vide resolution dated 26.12.2014, to file the present complaint and to pursue it. Complainant has one of Page 2 of 13 M/s. Amba Shakti Ispat Ltd. Vs. Oriental Insurance Co. Ltd. & Ors.
(Consumer Complaint No.03/2015) ____________________________________________________________ its factories at Kala Amb. The building, the plant & machinery, furniture & fixtures, stock and all other goods belonging to the complainant were insured with the opposite parties in the sum of `36.83 Crores for the period from 13.08.2013 to 12.08.2014, vide policy, Annexure C3. On 18.01.2014, one of two sheds of the factory, where Iron Melting Plant was installed, collapsed, resulting in damage to a vehicle, that was parked there and also to the plant and the machinery. Total loss sustained by the complainant, due to the aforesaid collapse of shed, was to the tune of `72.00 lacs. At the time of insurance, complainant was not informed about the terms & conditions of the policy. Only certificate of insurance, Annexure C3, had been supplied to the complainant. Terms & conditions had not been supplied. Complainant procured a copy of terms & conditions of the policy, only after damage had taken place, by making an application, under the Right to Information Act.
3. Complainant, as per averment in the complaint, was given to understand at the time of purchase of the policy that damage to the insured property, by any cause, would be insured under the policy. When the shed collapsed and damage was Page 3 of 13 M/s. Amba Shakti Ispat Ltd. Vs. Oriental Insurance Co. Ltd. & Ors.
(Consumer Complaint No.03/2015) ____________________________________________________________ caused, report was lodged with the police. A Police Officer inspected the shed and drew a report, copy Annexure C8. Intimation of loss was given to the opposite parties, who deputed a Surveyor. However, nothing was paid to the complainant, despite repeated reminders and supply of documents and other information asked for by opposite parties No.1 to 3 or their Surveyor, opposite party No.4.
4. Complainant served a legal notice, Annexure C22, upon the opposite parties. Notice was replied to by the opposite parties, vide Annexure C23, per which the claim had been closed, on account of the shed having not been maintained properly and damage having not occurred due to rain or storm, as alleged. Complainant then filed the present complaint, seeking the aforesaid directions to the opposite parties.
5. Opposite parties have contested the complaint and stated that though a Surveyor deputed by them, assessed the loss at `38,02,957/-, nothing had been paid to the complainant for the reason that damage to the shed and plant & machinery was not caused by any of the perils covered under the policy and that enquiry and investigation conducted by the Page 4 of 13 M/s. Amba Shakti Ispat Ltd. Vs. Oriental Insurance Co. Ltd. & Ors.
(Consumer Complaint No.03/2015) ____________________________________________________________ opposite parties, indicated that damage was caused to the shed due to its poor maintenance.
6. Parties were called upon to adduce evidence. Complainant has tendered in evidence various documents, which consists of reports of Experts, engaged by the complainant to get the loss and cause of damage ascertained, as also the reports of Panchayat and police. Opposite parties have placed reliance upon the report of their preliminary Surveyor, as also the final Surveyor, besides placing reliance upon terms & conditions of the policy, which according to them do not cover the risk of damage to the insured property due to rain.
7. We have heard learned counsel for the parties and gone through the record.
8. It is not in dispute that the property, which has been damaged, was insured with the opposite parties, vide policy, Annexure C3. Also, there is no dispute that one of the insured sheds collapsed, resulting in damage, not only to the shed, but also to the plant & machinery, as also a vehicle parked under the shed. The dispute is only with regard to the cause of damage. According to the complainant, damage was caused due to heavy rain and storm, while Page 5 of 13 M/s. Amba Shakti Ispat Ltd. Vs. Oriental Insurance Co. Ltd. & Ors.
(Consumer Complaint No.03/2015) ____________________________________________________________ according to the opposite parties, damage was caused due to improper maintenance of the shed. In the alternative, opposite parities have stated that damage due to rain, is not covered under the policy.
9. Complainant's plea is that terms & conditions of the policy were not supplied and that the functionaries of the complainant were given to understand that the policy would cover damage to the insured property, by any cause and that it was only after he procured the copy of terms & conditions, under the Right to Information Act, after the occurrence of damage, that he came to know that risk due to rain alone is not covered under the policy.
10. No-doubt, the opposite parties have not denied the plea that terms & conditions of the policy were not supplied with Annexure C3, the certificate of insurance, but they have very categorically stated in para-3 of their reply, on merits, that complainant had been getting the property, in question, insured, for the last ten years and the terms & conditions were supplied to them with the first policy and those terms & conditions have remained unchanged throughout. Also, it is stated that terms & conditions of the policy are available on the website of the opposite parties. Page 6 of 13 M/s. Amba Shakti Ispat Ltd. Vs. Oriental Insurance Co. Ltd. & Ors.
(Consumer Complaint No.03/2015) ____________________________________________________________
11. Complainant does not deny that terms & conditions of the policy were made available with the first policy. That means, the complainant was aware that policy which he had been getting renewed year after year, covered only those perils, which are specified in the terms & conditions of the policy. Risks specified in the policy, do not cover rain as such.
12. Terms & conditions of the policy, copy of which is Annexure C4, show that risk of storm is covered. Complainant's case from the very beginning, has been that the shed collapsed because of heavy rain and storm. Pradhan of the Panchayat, within the area of which, the factory of complainant is located, vide Annexure C14, certified, on the very day of occurrence, that there had been heavy rainfall and strong winds, since the night of 17.01.2014 and these two events (heavy rain and strong winds) caused the collapse of shed. Complainant also submitted Annexure C15, copy of daily data, maintained by the Meteorological Department, with regard to the rain. As per this document, total rainfall in Nahan Block was 84 mm in the month of January, out of which 41.2 mm rainfall took place on 18.01.2014, i.e. the day on Page 7 of 13 M/s. Amba Shakti Ispat Ltd. Vs. Oriental Insurance Co. Ltd. & Ors.
(Consumer Complaint No.03/2015) ____________________________________________________________ which the shed collapsed. Kala Amb is at a distance of fifteen to sixteen Kilometres from Nahan, by road. The aerial distance, may not be more than 3-4 Kilometres. Kala Amb is located at the foot of the hill, on the top of which Nahan is located. Document conclusively proves that on the day of occurrence, there was heavy rainfall in the area.
13. On the very day of collapse of the shed, complainant lodged report with the police. A police official went to the spot and reported that it had been raining heavily and it appeared that cause of collapse of the shed was heavy rain. Police report is, Annexure C8. Police report and the Panchayat report, coupled with Annexure C15, the statement of daily rainfall, prepared by the Meteorological Department, prove that there had been heavy rainfall on the relevant date. Rains in the month of January, unlike monsoon rains, are normally accompanied by thundering and lightening. Definition of Storm, as per New Shorter Oxford English Dictionary Thumb Index Edition (Volume-2), re-printed in 1993, includes heavy fall of rain, hail, or snow, a violent outbreak of thunder and lightning, unaccompanied by strong wind. Relevant portion reads as follows:-
Page 8 of 13
M/s. Amba Shakti Ispat Ltd. Vs. Oriental Insurance Co. Ltd. & Ors.
(Consumer Complaint No.03/2015) ____________________________________________________________ "A violent disturbance of the atmosphere, taking the form of high winds, often with heavy falls or rain, hail, or snow, thunder and lightning, rough conditions with high foaming waves at sea, and clouds of sand or dust in arid regions. Occas., a heavy fall of rain, hail, or snow, a violent outbreak of thunder and lightning, unaccompanied by strong wind."
That means, storm does not necessarily involve the flowing of strong winds. Even heavy fall of rain or violent outbreak of thunder and lightning, unaccompanied by strong wind, would fall within the definition of storm. The term storm is not defined in the policy and, therefore, dictionary meaning of the term can be looked into.
14. Report of Surveyor, engaged by the opposite parties, which is Annexure C25, records, vide para 12.8 that there might have been rains and winds on the date and time of loss, but they were definitely not so heavy and severe, to be called storm. Reason given by the Surveyor is that in such a situation, damage could have occurred to the other properties also and loss would have not been restricted only to the damaged property, which is one of the two Page 9 of 13 M/s. Amba Shakti Ispat Ltd. Vs. Oriental Insurance Co. Ltd. & Ors.
(Consumer Complaint No.03/2015) ____________________________________________________________ insured sheds. Complainant in his rejoinder has explained that the site of shed is located between two hills, in a funnel shaped area, where impact of the wind is stronger and severe, compared to other sheds and factories. Surveyor, per his report, Annexure C25, was apprised of this fact, as mentioned by the Surveyor in para 12.10 of his report. Surveyor did not dispute the fact, but stated that that was the normal condition in the area and that though damage due to Acts of God is covered under the policy, it is only when the Acts of God affect large areas and not just one property. This view is totally absurd.
15. As regards the specific plea of opposite parties that the shed collapsed due to diminishing of strength of load bearing structure, the Surveyor has though opined, vide para 12.12 that cause can be attributed to the diminishing of strength of load bearing structure or improper maintenance, over a period of time, this is just an opinion, not based on any scientific test, carried out on the collapsed column.
16. According to expert, engaged by the complainant, namely M/s. Jindals Consortium, whose report is, Annexure C16, column No.7 of the shed Page 10 of 13 M/s. Amba Shakti Ispat Ltd. Vs. Oriental Insurance Co. Ltd. & Ors.
(Consumer Complaint No.03/2015) ____________________________________________________________ buckled down, which resulted in the collapse of shed. Surveyor, engaged by the opposite parties does not dispute that structure collapsed because of buckling down of column No.7 of the Shed. When it was known to the Surveyor that shed had collapsed due to buckling down of a particular column, he could have very easily got the strength of the buckled column tested from same expert, in the matter.
17. Surveyor, per his report, Annexure C25, visited the spot twice. Once on 21st January 2014 and again on 16th February, 2014. He did not visit the site thereafter. Surveyor, after inspecting the spot, wanted the complainant to get the cause of collapse of shed determined from some Government agency. Surveyor addressed a letter, Annexure R-6, which is dated 23.01.2014, to the complainant, calling upon it that the collapsed shed should be got examined from some Government agency or authority on Structural Engineering, like IIT Roorkee. Acting upon this communication, complainant got the shed inspected from experts of PEC University of Technology, Chandigarh, who gave report, Annexure C-10, which is dated 3rd March, 2014. As per this report, a team of Civil Engineering Department, inspected the collapsed Page 11 of 13 M/s. Amba Shakti Ispat Ltd. Vs. Oriental Insurance Co. Ltd. & Ors.
(Consumer Complaint No.03/2015) ____________________________________________________________ shed and reported that there were heavy rain and storm and the fact had been confirmed by the Sarpanch of the Panchayat. In the opinion of the team, storm might have exceeded the designed wind speed, resulting in the collapse of shed.
18. As a result of the above stated position, we conclude that damage to the insured shed was caused due to storm and this peril being covered under the policy, vide Clause-VI, of terms & conditions, complainant is entitled to indemnification.
19. Coming to the quantum of loss, complainant initially stated the loss to the tune of `2.31 crores, per Annexure C7. Then, the loss was scaled down to `1.21 crores, vide Annexure C20. As per averments in the complaint, the shed, machinery & plant, which were damaged due to storm, have been repaired at a cost of `72.00 lacs. There is no documentary evidence, in support of the plea that that much amount of money has been spent on the repair of shed and machinery & plant. Surveyor appointed by the opposite party, vide his report, Annexure C25, has assessed the loss at `38,02,957/-. Complainant has not assailed the assessment done by the Surveyor in his complaint or the rejoinder. Page 12 of 13 M/s. Amba Shakti Ispat Ltd. Vs. Oriental Insurance Co. Ltd. & Ors.
(Consumer Complaint No.03/2015) ____________________________________________________________ Therefore, there should be no reason to doubt the correctness of assessment of loss, done by the Surveyor.
20. As a result of the above discussion, we allow the complaint and direct opposite parties No.1 to 3, to pay a sum of `38,02,957/-, by way of insurance money, with interest at the rate of 9%, per annum, from the date of filing of complaint, i.e. 31.03.2015, to the date of payment of the aforesaid amount of money, and also to pay `2.00 lacs as compensation for deficiency in service and a sum of `20,000/-, on account of litigation expenses.
21. A copy of the order be sent to each of the parties, free of cost, as per Rules.
(Justice Surjit Singh) President (Prem Chauhan) Member August 10, 2015.
*dinesh* Page 13 of 13