National Consumer Disputes Redressal
Oriental Insurance Co. Ltd. vs Athens Labs Limited on 31 March, 2016
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 655 OF 2013 (Against the Order dated 02/08/2013 in Complaint No. 07/2011 of the State Commission Himachal Pradesh) 1. ORIENTAL INSURANCE CO. LTD. BRANCH OFFICE, THE MALL, NAHAN, SIRMAUR HIMACHAL PRADESH ...........Appellant(s) Versus 1. ATHENS LABS LIMITED THROUGH ITS DIRECTOR CUM AUTHORIZED
HEAD OFFICE,
A-33, NATIONAL MARKET PEERAGARHI
NEW DELHI ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE K.S. CHAUDHARI, PRESIDING MEMBER
For the Appellant : Shri Kishore Rawat, Adv. For the Respondent : Shri Peeyush Verma, Adv.
Dated : 31 Mar 2016 ORDER
Pronounced on 31st March, 2016
ORDER
PER JUSTICE K.S. CHAUDHARI, PRESIDING MEMBER This appeal has been filed by appellant against the order dated 2.8.22013 passed by State Commission in Complaint No. 07 of 2011- M/s. Athens Labs Limited Vs. The Oriental Insurance Co. Ltd. & Anr; by which complaint was allowed.
Brief facts of the case are that complainant/respondent is engaged in manufacture of pharmaceutical products at Kala Amb. It has constructed a building for its factory, which was insured with the opposite parties/appellant for the period from 18.10.2007 to 17.10.2008 for the sum of Rs. 2,00,00,000/- (Rs. 1,70,00,000/- for the factory building and Rs. 30,00,000/- for boundary wall). In the months of July and August, 2008, there were continuous heavy rains in the area, where factory building is located and because of such rains, cracks developed in the building, causing huge loss. Opposite parties were apprised of the damage telephonically, on 26.08.2008, but when there was no response, a communication was addressed on 01.09.2008 in response to which a surveyor deputed by opposite parties visited the spot on 03.09.2008. The name of that surveyor was Pankaj Goel. Thereafter, a regular Surveyor-cum-Loss Assessor was deputed on 12.01.2009. He sought some information from the complainant, vide letter dated 20.01.2009, which was made available on 17.02.2009 together with various documents, which are marked Annexures A-4 to A-9. The documents included estimate, indicating the amount of money that was required for reconstruction of the building and the money so required, as per that estimate was Rs. 3,02,78,000/-. The said Surveyor-cum-Loss Assessor then asked for estimated loss on repair basis. Accordingly, Annexure A-11 repair-based estimate was submitted. The Surveyor-cum - Loss Assessor informed its functionaries that the loss had been assessed at Rs. 86,00,000/-. When nothing was heard from the opposite parties for quite some time, the complainant addressed a couple of letters to the opposite parties, calling upon them to settle the claim and to pay the insurance money, without loss of further time. Opposite parties repudiated the claim, vide communication dated 12.01.2010. Complainant made a representation to the opposite parties, explaining that the repudiation was not justified and explanation with respect to every ground of repudiation was submitted, in writing, through letter dated 03.12.2010, (Annexure A-14). Opposite parties did not respond to the aforesaid representation. Alleging deficiency on the part of the opposite parties, complainant filed complaint before State Commission. Opposite party resisted complaint and submitted that complainant being a Company and as such engaged in commercial activity, is not a consumer. On merits, it was stated that while filling in proposal form, the complainant suppressed material fact with regard to previous insurance claim, which the complainant had lodged with another Insurance Company, who had insured the building earlier and thus it had committed breach of a condition of policy. It was further alleged that building was already damaged and cracks etc. had been filled by cosmetic repairs at the time, when pre-insurance inspection was carried out and this amounted to an act of deception, on the part of complainant and denying any deficiency on their part, prayed for dismissal of complaint. Learned State Commission after hearing both the parties allowed complaint and directed Opposite Party to pay Rs. 79,07,909/- with 9% p.a. interest and further directed to pay Rs. 1.00 lakh as compensation and Rs. 20,000/- as litigation expenses, against which this appeal has been filed.
Heard Learned Counsel for the parties finally at admission stage and perused record.
Learned Counsel for appellant submitted that inspite of suppression of material information in proposal form and inspite of exclusion clause in the policy, Learned State Commission has committed error in allowing complaint, hence, appeal be allowed and impugned order be set aside. On the other hand, Learned Counsel for respondent submitted that order passed by Learned State Commission is in accordance with law, hence, appeal be dismissed.
As far suppression of material information in proposal form is concerned, perusal of proposal form reveals that complainant while submitting proposal form, did not disclose about previous policy obtained from National Insurance Co. Perusal of record and statement of opposite party witness- R.S. Kalra (OPW-6) reveals that complainant obtained insurance coverage from National Insurance Co. pertaining to construction of building and filed claim regarding some cracks against National Insurance Co. OPW-6- R.S. Kalra admitted in his cross examination that format of policy in respect of buildings which are under construction and which are completed are different and rate of premium is also different. Thus, it becomes clear that earlier policy obtained by complainant was pertaining to construction of building which was not required to be disclosed in proposal form submitted before opposite party and Learned State Commission rightly rejected plea of suppression of material information in the proposal form and in such circumstances, this arguments of Learned Counsel for appellant is devoid of force that complainant obtained policy by suppressing material information.
Learned Counsel for appellant submitted that as per surveyor's report and technical expert's report, complainant was not entitled to any claim on account of Exclusion clause in the policy which excluded claim on account of settlement or movement of made up ground as well defective design or workmanship or use of defective materials.
Learned Counsel for appellant has drawn my attention towards surveyor- Pankaj Goel's report in which he observed that for ascertaining exact cause, detailed analysis of various constituents will be required. Final survey report submitted by protocol surveyor observed in clause 10 that as per certificate issued by Engineer- Amandeep Singh, cracks have taken place due to subsidence of soil which should have taken place due to unexpected seepage of water in torrential rains in the area. He further observed that as per findings of structural consultants from Govt. Polytechnic, Nilokheri, the cement concrete Grade M-15 was used whereas it should have been of M-20 Grade. It was, further, observed that depth of foundation at site was not to the mark and height between base of footing and Tie beam was very high without any other beam between them and foundation of wall was placed on filled up soil and piping effect might have produced cause for foundation to settle. Perusal of report of Govt. Polytechnic, Nilokheri, reveals that at everywhere it mentioned that aforesaid reasons may cause loss but they were not sure and concluded that basic cause of damage seems to be differential settlement by one or the other reasons, the same has to be retro fitted under the guidance of some expert, meaning thereby, Govt. Polytechnic, Nilokheri, was not sure about the cause for loss and in such circumstances, on the basis of aforesaid report, it cannot be presumed that loss was caused due to settlement or movement of made up ground and defective design or workmanship or use of defective material. Even, Protocol Surveyor has observed that use of M-15 Grade cement and keeping a very high distance between footing and Tie beam may not be reason for the damage and further observed that as building had faced two monsoon seasons before disputed cracks, had structure itself was weak, it would have given way within a few months, which makes it crystal clear that loss caused to the building was not covered under exclusion clause. Protocol Surveyor in para 14 further observed that there was structural damage to the number of buildings in the vicinity and had there been construction problem in complainant's unit, such damage would have restricted to complainant's building only, which makes it crystal clear that loss was not caused due to use of alleged low grade cement and distance between beams and not providing proper foundation. On the contrary, S.K. Agrawal who carried out inspection before acceptance of proposal observed that complete factory is well built and proposal is fit for insurance. Explanation has been sought from S.K. Agrawal by letter dated 23.12.2009 and by reply dated 26.12.2009, he observed that insured intentionally did not show him damaged portion or might have hidden damages by keeping stocks in front of damaged portion but this explanation cannot be accepted because same explanation was given by him by letter dated 18.11.2009 without any request from opposite party which shows that this explanation was procured by opposite party for repudiating claim.
Protocol Surveyor observed in para 5 of his report that foundations are designed on Strip Footing and foundations rest at a depth of about 4 meters, which is 2 meter more than the recommended depth, thus, providing better structural stability and reinforcement design and spacing indicates that Net Bearing capacity of the foundations is more than 6 Ton per sq mtr. As per Engineer-Amandeep Singh's report, construction design checked at 15 different points after excavation and construction was found as per design and it was further observed that brick masonry in foundations in the central portion found as marked in drawing, which makes it clear that neither there was any defective design nor defective workmanship or use of defective materials and opposite party committed deficiency in repudiating claim and Learned State Commission has not committed any error in allowing complaint.
In the light of above discussion, I do not find any illegality in the impugned order and appeal is liable to be dismissed.
Consequently, appeal filed by appellant is dismissed at admission stage with no order as to costs.
-sd/-
......................J K.S. CHAUDHARI PRESIDING MEMBER