National Consumer Disputes Redressal
M/S. Reddy Veeranna Constructions Pvt. ... vs United India Insurance Co. Ltd. on 9 November, 2023
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 71 OF 2013 1. M/S. REDDY VEERANNA CONSTRUCTIONS PVT. LTD., Through its Director, Shri A. Venkata Ramanna, Class Court, 2nd Floor, No. 9/1, Richmond Road, BANGALORE - 560025. ...........Complainant(s) Versus 1. UNITED INDIA INSURANCE CO. LTD. Through its Regional Manager, Regional Office, 6th Floor, Krishi Bhawan, Nrupathunga Road, Hudson Circle, BANGALORE - 560001. ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE A. P. SAHI,PRESIDENT
FOR THE COMPLAINANT : MR. D.P. CHATURVEDI, ADVOCATE FOR THE OPP. PARTY : : MR. A.K. DE, ADVOCATE
Dated : 09 November 2023 ORDER
ORDER
1. This complaint has been filed by a Private Limited Company through its Director that undertakes contracts for construction of public works, including roads, dams etc. The present complaint is filed with regard to the non-settlement of an insurance claim that had been registered with the insurance company, claiming a loss while carrying out the work of construction of a water storage tank under the lift irrigation scheme at Village Muchonipally in Gattu Mandal, Mehbubnagar, Andhra Pradesh. The project was sanctioned and contract awarded and in order to cover the risk the complainant took a Contractors All Risk Insurance Policy from the opposite party that was valid for the period between 18.07.2008 to 17.07.2009 that was continued from 18.07.2009 to 17.01.2010.
2. The complainant commenced work on this project of the lift irrigation scheme titled as "Jawahar". According to the complainant heavy rains on an unprecedented scale were witnessed at the site, causing a breach in a part of the bund of the said project between 30.09.2009 and 03.10.2009. This breach occurred on account of this heavy rainfall. The water to be accommodated had to pass through a feeder canal to be constructed by another agency. Since the feeder canal had not been completed the water could not flow through the same and for that reason the portion of the bund which is a gorge was not raised to its final height leaving sufficient gap for the rain water to drain off to avoid any breach in the bund.
3. According to the complainant the said portion consisting of the gorge of the bund was kept open till November, 2008 by which time the rainy season was over and there was no threat of rain water. The gorge therefore could be safely enclosed and the work was undertaken by the complainant to ensure that the work is completed by February-March, 2009.
4. Unfortunately, in Feb., 2009, the local farmers commenced their agitation against the non-payment of their alleged dues of compensation towards the land acquired by the Government and during the protest that followed, the construction work was obstructed. It is in this background that the work could not be concluded as the rainfall in October, 2009 was unprecedented recording 261.1 mm against the average rainfall of 87.13 mm. The rainfall was three times in its intensity as against the previous records, which caused the damage.
5. The said torrential rains caused the breach and on 03.10.2009, the complainant dispatched this information with promptness to the opposite party insurance company informing it about the damage. Another letter was dispatched on 05.10.2009 requesting the opposite party to appoint a surveyor.
6. Mr. C.S. Balasubramanian was appointed as a surveyor by the Regional Office of the opposite party insurance company, who visited the site and submitted an interim survey report on 17.11.2009. The report describes that on the date of the loss there was not much activity at the breach site as there was a farmers' protest. The occurrence described heavy rains that had caused the reported breach of the earthen bund of gorge portion of the reservoir. There were other reported damages as well. The breach noticed was from chainage 2.70 kms to 2.80 kms. It was a complete breach and huge cracks had developed on the top of the earthen bund for about 10 M on either side of the project. The corresponding damages were also of the same lengths. Other breaches and rain cuts were also noticed and it was opined that the flooding did take place but how it caused the breach, is not known. It has again been stated therein that the State Irrigation Department was aware of the damage but it did not resolve the issue of protesting farmers as a result the project activities had come to a standstill.
7. However, while verifying the records, the following facts have been stated at Item No. 'H':
"H.1 The insured were maintaining Measurement Books where the works carried out at the project site were recorded on periodical basis, cross checked by irrigation dept. officials. The insured produced these MB books particularly those pertaining to the damaged sections of the project. My verification confirms that the parts of the works for which claim has been made have been already completed and were in place when the reported loss took place.
H.2 During our visit, I called for the last RA bill (RA bill no. 28th & part) and perused the same and noted that till 5/5/09 they have received a payment of Rs.33,26,70,104/- from their clients till then which is about 87 percent of the total contract.
H.3 Besides the MBs, the insured were also maintaining what is known as Placement Registers where important daily activities are recorded. These registers were also countersigned by dept. officials on regular basis."
8. While calculating the loss a final liability not exceeding Rs.1,80,00,000/- has been assessed.
9. The insurance company appointed another surveyor Mr. S. Anantha Padmanabhan. He is the final surveyor, who is also said to have carried out the survey on 05.04.2010, which is almost six months of the incident and submitted his report dated 25.05.2010. The inspection verification and the damages sustained indicate that a section of the dam for a length of 200 M was found washed away and he had also noticed the preliminary survey carried out by Mr. Balasubramanian referred to above. The cause of loss was attributed to the floods and a claim of Rs.1,16,04,153/- was calculated to be payable as against the claim of Rs.2,43,63,446/-. After assessing this net loss the final surveyor opined as follows:
"XII) Liability under the Policy:
The insured informed the undersigned, that, they had suspended all the works at site from December, 20 due to a local problem. Thereafter, they commenced the works between chainages 2.6 KM to 2.8 KM, and the works were again stopped during February, 2009. From this date, till the date of survey, they had not commenced the works and this Cessation of work has not been communicated to the Insurers. (copy of the insured's letter dated 18.01.2010, addressed to Mr. Balasubramanian, Surveyor, enclosed). Hence, the loss has occurred during CESSATION period and the CAR Policy specifically Excludes losses during Cessation and hence, it is our considered opinion, that, the loss is not tenable under the Policy."
10. The surveyor reported that the entire work had been suspended from December, 2008 onwards due to local problem of the farmers' protest and it was again stopped in February, 2009. The work had not commenced till the date of survey and this cessation of work had not been communicated to the insurers. Thus the loss had occurred during the cessation period hence in view of the terms of the policy this loss is specifically excluded and was therefore not admissible for indemnification in terms of the policy.
11. The aforesaid opinion of the surveyor was endorsed by the insurance company in its repudiation letter dated 19.11.2010 and the same is extracted herein below:
"Dear Sir, Ref. Reported Flood damage to Earthen Bund of Muchonipalli Balancing Reservoir in Nettampadu Village of Mehaboobnagar Dist. A.P. Date of Loss : 03.10.2009.
Ref. Policy No. 1) 070101/44/08/03/60000006-18.07.2008 to 17.07.2009
2) 070101/44/09/03/60000002-18.07.2009 to 17.01.2010 We refer to the above claim of yours. We reproduce hereunder the surveyor's observations in this regard.
"The insured had commenced the construction of earthen bund across the gorge portion in Feb/March 2009, when the works were stopped by the locals. The portion was completed half way. If this work had not been stopped, then the construction of the bund across the gorge portion would have been completed and the loss would not have occurred.
THE LOSS WHICH OCCURRED DUE TO THIS CESSATION OF WORK IS TREATED AS EXCLUSION UNDER THE POLICY."
It is noted that the work at construction site was suspended from December, 2008 for some reason and again during February, 2009 and the same was not communicated to us at all. It is also understood from the survey report that from the said date till the date of survey, works were not commenced. The loss has reportedly occurred during cessation period and the Contracts All Risks policy specifically excludes losses during Cessation.
In view of the above, no liability attaches to us udner the policy and hence we regret our inability to consider the claim as the loss is outside the purview of the policy"
12. In its letter of repudiation the insurance company takes the stand that the construction had commenced in February / March, 2009 when it was stopped by a local protest and the portion of construction had been completed halfway. If the work had not been stopped, then the construction would have been completed and which could have avoided the loss which occurred later-on in October, 2009.
13. On this it was recorded that this cessation of work results in attracting the Exclusion Clause of the policy and secondly, this contingency was not even communicated to the insurance company. The Exclusion Clause under the General Exclusions is quoted hereinunder:-
"d) Cessation of work total or partial"
14. A very crucial fact that has been brought on record by the complainant and which needs to be mentioned, as it has a bearing on the present controversy, that the very same surveyor who had submitted the report dated 25.10.2010, is stated to have been informed of a legal opinion dated 19.03.2011 rendered by Mr. Raghavan, Advocate to the insurers stating that the Cessation Clause cannot be made the basis for not treating the claim payable as there was no cover during which the work had not progressed. Taking notice of the said information the surveyor revised his final opinion through an Addendum dated 30.04.2012, which is extracted herein under:
" Addendum Ref. 1) Our Survey Report dt. 15.05.2010 in respect of M/s. Reddy Veeranna & Co.
2) Legal opinion of Mr. Raghavan, Advocate dt. 19.03.2011 Reference is invited to our Survey Report dt. 15.05.2010, wherein, under serial No. XII, Liability under the Policy, we had stated that, since the loss has occurred during Cessation period and Cessation being a specific Exclusion under the Policy, the loss is not tenable under the Policy.
The Insurers have since obtained a Legal Opinion from Mr. Raghavan, Advocate, Chennai, which states that, The Exclusion of damage caused by Cessation cannot be the basis for an interpretation that, there was no cover during the time when the work could not progress and that the claim is payable.
In terms of the above opinion, since the loss is tenable under the policy, the Insurer's liability shall be Rs.1,16,04,153/- as assessed in our Survey Report."
15. Learned counsel for the complainant contends that in view of this document, which is on record as Annexure C-20 has been mentioned in paragraph 33 and 34 of the complaint. The reply contained in paragraph 34 and 35 of the Written Version nowhere disputes either the existence or the issuance of the Addendum tendered by Mr. Anantha Padmanabhan, the final surveyor.
16. In the above background, it is urged that the repudiation is neither justified nor is it in tune with the surveyor's addendum report dated 30.4.2012 hence the claim deserves to be allowed.
17. Responding to the said submissions, Mr. De, learned counsel for the insurance company submits that the surveyor's report categorically records the cessation of work and therefore, in terms of the policy, which is on record and is undisputed, the Exclusionary Clause is clearly attracted and consequently the claim has been rightly repudiated.
18. It is further submitted that the complainant made a representation raising his grievances that was examined in detail once again and the Regional Manager intimated the complainant that since the complainant had not disclosed the fact of cessation of work to the insurance company, the same was a violation of Condition No. 4(b) of the Policy. It is urged that no such information was given hence the cessation of work, which stands established on record for almost a year, disentitles the complainant to receive any claim. The insurance company rejected this representation on 25.07.2012 which is extracted herein under:
"Dear Sir, Reg. - Reported Flood damage to Earthern Bund of Muchonipalli Balancing Reservoir in Nettampadu Village of Mehaboobnagar Dist. AP.
Date of Loss: 03.10.2009 Ref.: Policy (1) 070101/44/08/03/6000000-18.07.2008 to 17.07.2009 (2) 070101/44/09/03/60000002-18.07.2009 to 17.01.2010 The above claim was repudiated by the branch office under cover of its letter dated 19.11.2010 highlighting the fact that the surveyor had notice that "The insured had commenced the construction of earthen bund across the gorge portion in Feb/March 2009, when the works were stopped by the locals. The portion was completed half way. If this work had not been completed stopped, then the construction of the bund across the gorge portion would have been completed and the loss would not have occurred" and as loss occurred due to cessation of work the same is excluded under the policy.
It was also noticed that the insured had not disclosed to the company about the cessation of work during the Policy Period. This is a violation of Policy Condition No. 4(b) which states that "The Insured shall immediately notify the Company by Telegram and in writing of any material change in risk and cause at his own expense such additional precautions to be taken as circumstances may require and the scope of cover and / or premium shall, if necessary, be adjusted accordingly."
Thereafter you have appealed to our Head Office Grievance Cell under letter ref: RVCPL/UNI-INS-CLAIM-NETT/2009-10 dated 05.12.2010. The matter has been examined once again in detail. As instructed by the Head Office you were called upon to complete the work in full and submit final bills, that upon scrutiny of the bills bank statement, it is observed as follows:-
(1) No payments have been made to the Contractor for the bills raised by him dated 25.01.2012.
(2) The bills submitted by the insured and the Contractor appears to be identical in format and font size. Hence the authenticity of the bills are questionable.
The Cessation of work which you have not informed to the company had a direct bearing on the occurrence of loss, and consequently the peril stands excluded. Vide your letter dated 18.01.2010 you have stated that only after November 2008, after the monsoon rains we took up constructions of the bund across the gorge portion and planned to complete the same by Feb/March 09 so that the reservoir would be ready in all ready in all respects with spillway etc. before the onset of the next monsoon. But during the course of the work local farmers stopped it in February 2009 for want of clearance of their land acquisition payments by the AP Government. But for this unexpected interruption, the entire project work would have been completed in the month of April 2009 itself and the loss would have not happened. This clearly establishes that the loss occurred due to cessation of work and not during the cessation of work.
In view of the above, no liability attaches to us under the policy and hence we regret our inability to consider the claim as the loss is outside the purview of the policy."
19. Mr. De submitted that in the wake of these admitted positions there is no liability on the insurance company to indemnify as according to the General Conditions no observance and fulfilment of terms of policy, also creates a clear bar in this respect. Clause 4(b) is extracted herein under to appreciate this argument:
"4(b) The Insured shall immediately notify the Company by Telegram and in writing of any material change in the risk and cause at his own expense such additional precautions to be taken as circumstances may require and the scope of cover and / or premium shall, if necessary, be adjusted accordingly."
20. To support his submissions Mr. De argued, for which there are no pleadings on record, that it is evident that the complainant raised a Running Bill No. 28 and part bill on 25.07.2009 for the work executed during April and May, 2009. Apart from this, no running bills during this period of seven months were produced in order to demonstrate that the work was actually carried out. There were no Measurement Books produced to support this contention. Mr. De submits that in the absence of any such proof the only inference that can be drawn is that no work was going on and this fortifies the conclusions drawn by the surveyor as well as by the insurance company that there was complete cessation of work. He submits that it is unimaginable that if the work was continued all throughout there is no reason as to why only one running bill was raised. He therefore, submits that there was cessation of work and ultimately in the absence of any proof of the work continuing the repudiation is justified.
21. There is one document which has been emphasised by the learned counsel for the complainant viz. which has been filed by way of an evidence through the affidavit on behalf of the complainant contained in Volume-II commencing from page 268 onwards. This is an extract of a register recording the progress of the works undertaken by the complainant. The same runs in several pages and at page 292 (internal page 150) it indicates the nature of the work which was in progress. These are the dates between 30.09.2009 and 03.10.2009, including the dates prior to them and subsequent thereto. The said document is on record and has been verified by the surveyor on 19.03.2012 who has endorsed the words "verified records" followed by his signatures and the dates referred to above. This document which is Exhibit C-7 has been referred to as the document accompanying a letter dated 14.11.2009 that was sent to the surveyor. It has been referred to in paragraph 19 of the complaint to which the reply has been given in paragraph 9-22 of the Written Submissions where there is only a bald denial while supporting the statements made in the surveyor's report without any reference to this document. The rebuttal therefore, is not accompanied by any specific recital by disputing the contents of this document including it's verification by the surveyor.
22. It is evident at this stage that the Bench hearing the matter on 16.02.2016 passed the following Order:
"Dated 16th February, 2016 ORDER IA NO. 4462 OF 2015 The instant consumer complaint has been filed against the opposite party / insurance company alleging deficiency in service on the part of the in respect of the insurance claim submitted by the complainant.
It is submitted by learned counsel for the complainant that pursuant to the insurance claim, one Shri Anantha Padmanabhan, was appointed as a surveyor by the opposite party who after the survey, submitted his report. It is contended that his evidence is necessary for just adjudication of the consumer dispute. Therefore, it is prayed that Shri S. Anantha Padmanabhan be summoned as a witness to dispose in respect of his survey report, Application is opposed by the counsel for the opposite party.
We have considered the rival contention.
Undisputedly, the insurance company appointed Shri S. Anantha Padmanabhan as a surveyor, who after the survey report submitted his report. Therefore, his evidence, in our considered view is relevant for just adjudication of the dispute. We, therefore, direct the opposite party to file an affidavit evidence of Shri S. Anantha Padmanabhan in support of his survey report, within six weeks with advance copy to counsel for the complainant. Complainant may file interrogatories, if in the nature of cross-examination, if he desire to do so.
List on 11.08.2016"
23. The Bench directed an affidavit of evidence to be filed by Mr. Padmanabhan.
24. On 06.02.2017, the complainant's counsel filed Interrogatories and the opposite party insurance company again took time to file their evidence by way of affidavit and then on 22.11.2017, took time to file reply to the Interrogatories as the surveyor was reported to be abroad. This time was extended thereafter on three occasions and finally on 22.04.2019, the reply to the interrogatories were dispensed with 20,000/- costs and the matter was directed to be listed for final arguments on 02.04.2019.
The Covid intervened where-after the matter was listed for 08.03.2021 for final hearing and was again adjourned which continued in 2022 and then finally on 11.07.2022 the Bench commented upon the unnecessary adjournments and granted one last opportunity for listing the matter for final hearing on 09.10.2023. The arguments commenced on the said date and were finally concluded on 19.10.2023.
25. No document or any other material was filed in order to support the stand taken by the surveyor in response to the Commission's directions to the opposite party to furnish the affidavit and the reply to the interrogatories. The matter therefore has been heard on the basis of the material which is already on record after noticing the arguments as raised by the learned counsel for the parties noted hereinabove.
26. It is in this background that the question of any default on the part of the complainant regarding the information not having been tendered in terms of Clause 4(b) has also to be considered. In this respect, learned counsel for the complainant has invited the attention of the assertions made by the complainant that there was no question of intimating cessation of work inasmuch as the work was in progress that has been indicated with the help of the documents referred to above and also the Addendum dated 30.04.2012 extracted hereinabove to urge that, the explanation given by the complainant in his representation dated 05.12.2010. From the circumstances and the documents referred to above, it is amply established that the floods due to heavy incessant rains that took place between 30.09.2009 and 03.10.2009, were promptly intimated on 03.10.2009 and again on 05.10.2009 whereupon the surveyors were appointed as already indicated above. In the above background, the contention raised on behalf of the insurance company and the stand taken on cessation of work and no information about the farmers' protest, is without any foundation hence the claim deserves to be allowed.
27. The twin contentions arising in this complaint namely about the non-intimation to the Insurance Company about the Farmers' protest or Cessation of work and the default in proceeding to establish the continuance of the work, the evidence on record has to be assessed. The contention of the Complainant is that the work was continuing even after February, 2009 as such there was no occasion to have intimated the Opposite Party regarding cessation of work. The brief interruptions were caused by the farmers stir that was intimated through the letters dated 15.12.2018, 9.2.2009, 3.3.2009 and 12.3.2009 to the Engineers of the Government Department to avoid these obstructions by resolving the claim of compensation by the farmers.
28. The farmers protest stopped the work for one day as per the letter dated 15.12.2008 and letter dated 9.2.2009. Another strike dated 3.3.2009 was reported followed by the letter dated 12.3.2009 to the departmental Engineers for resolving the dispute. The work however is stated to have been continuing for which the Work Progress Register document has been produced and remains unrebutted which was verified by the Surveyor as noted above. These brief interruptions are neither partial nor total so as to construe cessation of work. Nonetheless, it is also proved that the work was continuing as on the date of the loss. Therefore to infer that there was cessation in the past, that caused the loss does not appear to be a plausible or probable conclusion, so as to attract the Exclusion Clause.
29. Apart from this, the interruptions caused were unforeseen and were not voluntary on the part of the Complainant. The farmers' protest was beyond its control. There was no lack of performance or intentional or deliberate cessation to attribute any fault on the Complainant. Thus none of the Clauses of the General Conditions of C A R Policy to exclude liability of the Insurance Company are attracted. The risk of flooding and loss due to torrential heavy unexpected rains is clearly covered for indemnification under the Policy. In effect the bills that were raised even in May, 2009 are a testimony to the fact that the work was continuing and had not stopped.
30. There is an evidence brought on record by the Complainant which is in the shape of a Work Progress Register that was verified by the Surveyor and has been filed on record by the Complainant. The extracts of the Work Register do indicate the work which was being undertaken by the Opposite party and the said Register also records the work which was going on during the heavy rains from 30.9.2009 to 3.10.2009. The last page of the Register has been verified by the Surveyor on 19.3.2012. The said document is on record and the existence of the said document as well as the endorsement of the Surveyor verifying the same has not been effectively rebutted. Mr. De, Learned Counsel for the Insurance Company urged that it is not a measurement book. The Register on a closer scrutiny indicates the reporting of the extent of the work accomplished. The interim Survey Report dated 17.11.2009 records the maintenance of Measurement Books cross-checked by the Irrigation Department that were produced by the Complainant quoted hereinabove. This therefore dispels all doubts regarding cessation.
31. The aforesaid evidence therefore cannot be ignored or brushed aside as the Final Surveyor in his Report mentions in a sweeping manner about the work not being undertaken without adverting to these documents. It is also evident from the Report dated 17.11.2009 of the Interim Surveyor that parts of the work, for which claim has been made, have been completed and were in place. The conclusion therefore drawn by the Final Surveyor that from February, 2009 till the date of survey, no work had progressed and there was Cessation appears to be against the record and the evidence adduced. Mr. A.K. De, Ld. Counsel for the Insurance Company attempted to raise the doubt on the ground that running bills not being furnished within this span of six months indicates that there was no work done as the contract conditions do require the submission of running bills every month. This contention has to be examined in the light of the Final Survey Report dated 25.5.2010 which nowhere indicates this to be a reason to believe cessation of work. This is also not an indication in the repudiation letter dated 19.11.2010 that non-submission of running bills establishes cessation of work. The contention of Mr. De on this ground, therefore, remains unsubstantiated and these oral arguments cannot substitute the weight of the evidence on record as discussed hereinabove. The Commission had directed the Insurance Company vide Order dated 16.2.2016 to furnish the evidence of the Final Surveyor, Mr. Padmanabham by way of Affidavit which was not done. This therefore is an approach of withholding the testimony of the Final Surveyor who could have been questioned on these aspects which has not been done and therefore it is legitimate to draw an adverse inference against the Insurance Company for having failed to substantiate the contents of the Report dated 25.5.2010. Consequently, this ground of repudiation on cessation of work does not hold water.
32. The word cessation ordinarily means a pause, a rest or a lull or a suspension. It also connotes an act of ceasing or final termination. The evidence in this case nowhere suggests closure of the work. A brief pause during the farmers protest does not amount to cessation or partial stoppage. Another interesting conclusion drawn by the Insurance Company in its letter dated 25.7.2012 while rejecting the representation/appeal is that the loss occurred "due to cessation of work" and "not during the cessation of work". This finding appears to be based on the premise as if the work had ceased and therefore the loss had not been incurred during the cessation of work, rather had the work been completed without cessation, the loss would not have occurred. This conclusion overlooks the fact of the drainage not having been constructed by the other agency and also the preventive measure taken of not having raised the height of the gorge. It also overlooks the fact that rains were unprecedented, thrice the normal as is evident from the Tehsildar's report dated 22.10.2009. The loss was therefore suffered during the continuance of the work due to the torrential rainfall.
33. Having arrived at the conclusion that the Insurance Company failed to establish the cessation of work in order to invoke the Exclusionary Clause of the Policy, there was no occasion to the Complainant to have given any information about cessation of work as the work was continuing. The work may have been obstructed on account of the protest of the Farmers for a short time but the work appears to have continued and performed by the Complainant including the period from February, 2009 onwards till the torrential rains occurred and caused the loss.
34. The Complainant also gave their valid explanation of not having raised the height of the gorge and having undertaken measures in order to minimize the loss. However, the undisputed torrential rains were such that it was beyond the control of the complainant, and consequently the complainant had been able to establish that the loss and damage suffered was on account of the calamity that was covered under the Perils Policy and the Exclusionary Clause would not apply.
35. It is also to be noted that the Addendum Report of Mr. S. Anantha Padmanabhan, the Final Surveyor, dated 30.4.2012 also establishes that the Complainant has an insurable claim. Mr. De was unable to contradict this Report or offer any plausible argument negating the same.
36. Hence for all the reasons stated hereinabove, the breach in the Dam was caused due to heavy rains and that was clearly covered under the Insurance claim. The deficiency in service by erroneously repudiating the claim is established.
37. Accordingly, the extent of damages sustained and as covered under the Policy has to be computed. The damage caused on account of the breach claimed by the Claimant is Rs. 1,40,89,333/-. The assessment made by the Surveyor as against this amount is Rs. 1,16,04,153/-. This assessed amount therefore deserves to be indemnified to the Complainant. This net loss therefore is payable to the Complainant which also seems to be justified.
38. There is another claim made by the Complainant regarding removal of the damaged portion and redoing the same to the tune of Rs. 1,02,74,112/-. The Surveyor has dropped this claim on the ground that this exercise was undertaken at another portion of the site in order to avoid damage to the affected portion which was a pressure relieving system, and therefore it cannot be construed as a loss minimization measure for the portion of the Bund which was breached. The aforesaid conclusion drawn by the Surveyor seems to be justified in as much as the terms of the risks under the Policy covers material damage which does not seem to be either under the specific or general conditions of the Policy. This is a cost which was incurred for prevention or rectification in order to avoid any damage to the construction of the Bund. Thus, this was not a loss or damage suffered and therefore the Exclusionary Clause to that extent under Section 1 would be attracted. Consequently, accepting the said finding of the Surveyor, the claim on that count cannot be indemnified. Accordingly, the liability payable shall be to the tune of Rs. 1,16,04,153/- which shall carry interest @ 9% p.a. with effect from the date of loss suffered i.e. 5.10.2009. The same shall be payable within a period of 03 months and in the event of any default, the rate of interest shall stand @ 12% p.a. .........................J A. P. SAHI PRESIDENT