National Consumer Disputes Redressal
Oriental Insurance Co.Ltd. vs M/S Sathyanarayana Setty & Sons on 14 March, 2012
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO.3454 OF 2007 (From the order dated 04.07.2007 in Appeal No.1420/2006 of the State Commission, Karnataka) Oriental Insurance Co.Ltd. Petitioners(s) Versus M/s Sathyanarayana Setty & Sons Respondent(s) BEFORE : HONBLE MR.JUSTICE ASHOK BHAN, PRESIDENT HONBLE MRS. VINEETA RAI, MEMBER For the Petitioners(s) : Mr.S.M.Tripathi, Advocate Ms.Poonam Gupta, Advocate For the Respondent(s) : Mr.Anil Kr.Mishra, Advocate Pronounced on 14th March, 2012 ORDER
PER VINEETA RAI, MEMBER Oriental Insurance Co. Ltd. (hereinafter referred to as the Petitioner) has filed this revision petition against the order of the State Consumer Disputes Redressal Commission, Karnataka (hereinafter referred to as the State Commission) in Appeal No.1420/2006 which was decided in favour of M/s Sathyanarayana Setty & Sons, Respondent herein who was the original complainant before the District Forum.
In his complaint before the District Forum, Respondent/Complainant had contended that he had taken a Fire and Special Perils Policy from the Petitioner/Insurance Company in respect of his business premises for storing fire crackers from 06.08.2004 to 05.08.2005 for an assured sum of Rs.30 lakhs. Due to heavy rains in Mysore City on 10.07.2004, 16.07.2004 and 04.08.2004, leakages and dampness occurred in the walls as a result of which the fire crackers stored in the premises were totally damaged and the same could neither be sold nor made fit for use. Respondent, therefore, filed a claim with the Petitioner/Insurance Company which was repudiated vide communication dated 06.10.2004 informing him that his claim is not covered under specified risks mentioned in the policy. Being aggrieved, Respondent filed a complaint before the District Forum on grounds of deficiency in service and requested that Petitioner/Insurance Company be directed to pay him Rs.90,000/- towards the loss suffered and Rs.2,000/- as litigation costs.
The above contentions were denied by the Petitioner who stated that following his complaint and claim sent by the Respondent, Petitioner had appointed a Surveyor & Loss Assessor to conduct the survey and assess the loss and also find out its causes. The Surveyor in his report dated 04.10.2004, after visiting the site confirmed that the damage had occurred to the fire crackers stored in the premises due to seepage of the water inside the premises from the roof but this occurred because the building was old and not maintained properly. Further, there was fungus formation due to the seepage for long periods for which no action was taken and which remained undetected. Since the damage to the fire crackers was due to seepage and rain water over a period of time and not due to Storm, Hurricane, Typhoon, Cyclone, Tempest, tornado Flood and Inundation as specifically provided in the policy, the claim was rightly repudiated.
The District Forum after hearing both parties and on the basis of evidence, allowed the complaint and directed the Petitioner to pay the Respondent, compensation of Rs.80,000/- along with interest @ 9% per annum.
Aggrieved by this order, Petitioner filed an appeal before the State Commission which dismissed the same by observing as follows:
The learned counsel appearing for the Insurance Company submitted that under clause (VI) of the policy the damage caused to the fire works does not cover the risk and therefore the repudiation of the claim by the Insurance Company is justified. Clause (VI) of the Standard Fire and Special Perils policy reads as follows:
Clause (IV): Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and inundation:
Loss, destruction or damage directly caused by Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood or inundation excluding those resulting from earthquake, Volcanic eruption or other convulsions of nature. (Wherever earthquake cover is given as an add on cover the words excluding those resulting from earthquake volcanic eruption or other convulsions of nature shall stand deleted.
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In the instant case it is not in dispute that there was a heavy rain on 10.07.2004, 17.06.2004 and 04.08.2004.
Due to this heavy rain there was a dampness which ultimately resulted in the leakage of water from the roof.
Even as per the report of the Surveyor the cause for damage is due to the leakage of water from the roof. If the leakage water falls on the material stored then necessarily it comes within the meaning of inundation. Therefore, in our view the DF is right in awarding compensation of Rs.80,000/- though the claim of the complainant is much more than the quantum of compensation awarded by the District Forum.
Hence, the present revision petition.
Counsel for both parties made oral submissions.
Counsel for Petitioner stated that learned Fora below erred in not strictly interpreting the provisions of the insurance policy which clearly did not cover seepage caused due to heavy rains and specifically included only Storm, Hurricane, Typhoon, Cyclone, Tempest, tornado Flood and Inundation. Further it needs to be noted that the heavy rains which caused the seepage to the old building and spoilt the fire crackers occurred a few days prior to taking of the insurance policy. Therefore, taking into account all these facts and since seepage and dampness in the premises is not covered as a risk under Clause IV of the Policy the claim was rightly repudiated.
Counsel for Respondent on the other hand stated that the fact that the fire crackers were spoilt as a result of heavy rains which had occurred just a few days prior to taking the policy that had severely affected the building causing seepage and dampness was confirmed by the Surveyors Report. Counsel for Respondent pointed out that the National Commission in a number of cases including in New India Assurance Co.Ltd. Vs. M/s Dani Mourdhwaj Cold Storage Pvt. Ltd. R.P.No.4113/2007 decided on 10.02.2012, has held that floods or inundation would also include seepage.
In the instant case, seepage causing damage to the fire crackers would be, therefore, covered as per the terms and conditions of the policy since it was a direct result of the flood/inundation caused by the heavy rains. Merely because the word seepage is specifically not mentioned, the claim cannot be repudiated.
We have heard learned counsel for both parties and have gone through the evidence on record. The fact that the Respondent had taken a Fire and Special Perils Policy from the Petitioner/Insurance Company is not in dispute. It is also an admitted fact and confirmed by the Petitioners Surveyor & Loss Assessor that damage to the fire crackers which have been insured was caused due to seepage of rainwater and dampness following heavy rains in the area around the time when the insurance policy was taken.
As stated earlier, the claim was repudiated on the grounds that seepage was not specifically covered in the policy and further any outcome of inundation or floods would not be covered since in the insurance policy it is clearly stated that loss, destruction or damage directly caused by inter alia, floods, inundation etc. would only be covered. National Commission had occasion to examine this issue in a number of cases including in Bajaj Allianz General Insurance Co.Ltd. Vs. Gondamal Hardyal Mal IV(2009) CPJ 165 (NC) and in New India Assurance Co.Ltd. Vs.M/s Dani Mourdhwaj Cold Storage Pvt. Ltd. (R.P.NO.4113/2007 decided on 10.02.2012) wherein it had concluded in respect of an identical insurance policy that floods/inundation also means outpouring of water and on this analogy seepage would be included. Further, the contention of the Counsel for Petitioner that the word directly used in the insurance policy would exclude any outcome of the floor such as seepage has also been dealt with in Bajaj Allianz (supra) wherein this Commission has observed as under:
Ld. Counsel for the petitioner relies upon condition VI of the policy, which reads as under:-
VI. STORM, CYCLONE, TYPHOON, TEMPEST, HURRICNE, TORNADO, FLOOD & INUNDATION Loss destruction or damage directly caused by storm cyclone, typhoon, tempest, hurricane, tornado, flood and inundation excluding those resulting from earthquake volcanic eruption or other convulsions of nature.
It is his case that since this was a question of leakage of water from roof, hence, it is not covered under any of the perils covered under the Policy.
In support of this contention, Counsel for the petitioner has produced before us the definition of inundation as obtained from the website.
After hearing the Counsel for the petitioner and material on record, we find that this Commission had occasion to deal with a similar type of case in the case of M/s. National Insurance Co. Ltd. Vs. Marthi Crystal Salt Co. Ltd. [1986-2002 Consumer 6043 (NS)] and United India Insurance Co. Ltd. Vs. Dipendu Ghosh & Anr. [II (2009) CPJ 311(NC)], wherein this Commission has interpreted the word Direct Cause as appears in the terms of the Policy and had recorded as under:-
Learned Counsel for the respondent brought on record the copy of P. Ramanatha Aiyars The Law Lexicon, Law Dictionary. As per this dictionary, the word direct cause as well as Direct and proximate cause has been defined as under:
Direct Cause that which sets in motion train of events which brings about result without intervention of any force operating or working actively from new and independent source; or , one without which the injury would not have happened. Norbeck v. Mutual of Omaha Ins. Co., 3 Wash. App 582, 476 p 2d, 546, 547 (Blacks Law Dictionary) (Emphasis supplied) This Commission had also occasion to go into this question again in the case of United India Insurance Co. Ltd. Vs. Imperial Gift House & Anr. [I (2007) CPJ 6 (NC)], in which it was held that as per Oxford Concise Dictionary, relied upon by the State Commission, the word Flood also mean, an outpouring of water.. and tornado, beside other means, ..a great down pour of rain.. Nothing to the contrary has been shown to challenge the finding recorded by this Commission in the two Judgements (supra), meaning thereby that tornado, will also mean, ..a great down pour of rain.
It is not disputed, as per facts brought on record, by the Counsel for the petitioner, that on account of rain, the rainwater poured into the godown through the holes from the roof of the godown, thus, inundating or wetting the stock in the godown.
In view of the Judgements (supra) in which we have extensively dealt with the meaning of risk covered by the Policy, we are unable to sustain the arguments advanced by the Counsel for the petitioner that the word inundation would invariably associate with the flood, as he understands. As already described above, as per Oxford Concise Dictionary, Flood also means, .An outpouring of water. Thus, in view of the law settled by this Commission on these points, we see no merit in the arguments advanced by the Counsel for the petitioner.
A similar find was given by this Commission in New India Vs. Dani Mourdhwaj(supra). Thus, in consonance with and following our own finding on the subject, we are of the view that in the instant case the seepage which was caused directly by inundation due to heavy rains, is covered by the insurance policy and the claim was wrongly repudiated by the Petitioner/Insurance Company. We, therefore, find no infirmity in the order of the State Commission and uphold the same. The revision petition is, therefore, dismissed. Petitioner is directed to pay the Respondent, Rs.80,000/- with interest @ 9% per annum from 22.12.2004 till realization and Rs.1,000/- as litigation costs within six weeks from the date of receipt of this order failing which the interest @ 12% per annum will be applicable on the entire amount from 22.12.2004 till realization.
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(ASHOK BHAN J.) PRESIDENT Sd/-
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(VINEETA RAI) MEMBER /sks/