National Consumer Disputes Redressal
M/S. Mudit Roadways vs Authorized Signatory New India ... on 10 August, 2022
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 765 OF 2020 1. M/S. MUDIT ROADWAYS Through its Proprietor Mr. Anesh Goenka,
Office at 504,
Mayuresh Cosmos,
Plot No. 37,
Sector-11, CBD-Belapur, Navi Mumbai - 400 614 ...........Complainant(s) Versus 1. AUTHORIZED SIGNATORY NEW INDIA ASSURANCE LTD. & 3 ORS. New India Assurance Bldg.,
87, M.G. Road, Fort, Mumbai - 400 001 Maharashtra 2. NEW INDIA ASSURANCE CO. LTD. Deputy General Manager,
New India Bhavan,
34/38, G. Vaidya Road,
Kala Ghoda, Fort, Mumbai - 400 023 Maharashtra 3. NEW INDIA ASSURANCE CO. LTD. Regional Manager,
Claims-Hub-Mumbai Regional Office-1,
New India Center, 12th Floor,
17/A, Cooperage Road, Mumbai - 400 039 Maharashtra 4. NEW INDIA ASSURANCE CO. LTD. Divisional Manager, Vashi DO 170800,
Office No. 501/516,
5th Floor,
Plot No. 74,
Persipolis Bldg.,
Sector-17, Vashi, Navi Mumbai Maharashtra ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT
For the Complainant : For the Opp.Party :
Dated : 10 Aug 2022 ORDER
1.The present Consumer Complaint has been filed under Section 2(1)(d)(g) of the Consumer Protection Act, 1986 (for short "the Act") against New India Assurance Co. Ltd. (hereinafter referred to as Opposite Party Insurance Company) seeking direction to the Insurance Company to pay ₹6,57,55,155/- towards insurance claim alongwith compensation.
2. According to the Complainant, facts of the case are that the M/s Mudit Roadways, the Complainant, which is a proprietary concern, is engaged in the business of Transportation and Warehousing, hired a premises admeasuring 106750 sq. ft. (covered area) and 15000 sq. ft. (open area) respectively at Survey No. 09, Hissa No. 03, at Village - Veshvi, Taluka - Uran, District - Raigad, Maharashtra belonging to M/s. Platinum Logistics, for warehousing purpose for 5 years w.e.f. 1.07.2015 to 30.06.2020, vide Lease and License Agreement dated 04.07.2015. License for Warehouse was granted by the Custom Authorities to the Complainant on the land situated at Survey No. 09, Hissa No. 03, at Village - Veshvi, Taluka - Uran, District - Raigad, Maharashtra. The Complainant obtained 2 Insurance Policies in the year 2015, 6 Policies in 2016 and 5 Policies in 2017 and had paid ₹44,02,562/- towards total premium to the Opposite Party Insurance Company for safeguarding the Custom bonded goods for covering the risk against Fire and other risk from the Opposite Party Insurance Company. The details of relevant Policies taken in the year 2017 are as under:-
Sl. No. Policy Description Policy No. & Date Period of Policy Sum insured Premium Paid
1. Standard Fire and Special perils Policy 17080011170100000734 Dated 19.06.2017 19.06.2017 to 18.06.2018 6,00,00,000 1,34,033
2. Standard Fire and Special perils Policy 11140011170100001014 Dated 30.11.2017 30.11.2017 to 29.11.2018 150,00,00,000 6,01,800
3. Additional endorsement to Custom Duty Package Policy 11140046172480000017 Dated 29.12.2017 30.09.2017 to 29.09.2018 75,00,00,000 6,49,000
3. During the currency of the aforesaid Policies, unfortunately on 14.03.2018, fire took place in the insured Warehouse of the Complainant. The incident was informed to the Opposite Party Insurance Company as well as to the Deputy Commissioner of Customs. The Opposite Party Insurance Company appointed M/s. J C Bhansali and Co. as Surveyors to assess to the loss. On 03.10.2018 the Complainant filed detail claims with Opposite Party Insurance Company for a total sum of ₹6,57,55,155/- (₹5,54,17,891/- under Policy No. 17080011170100000734, ₹18,73,984/- under Policy No.11140011170100001014 and ₹2,15,18,802/- under Policy No.11140046172480000017).
4. The Complainant also reported the incident to the Police and accordingly FIR No. 03/2018 was registered on 15/03/2018. After conducting an enquiry, the Police Authorities vide letter dated 03.11.2018 informed that fire incident that occurred at the Complainant's Warehouse situated at Survey No. 9 Hissa 3 (9/3) Village Veshvi, Tal-Uran, Dist- Raigad has been caused due to electrical short circuit and the aforesaid Police Report dated 03.11.2018 was duly forwarded to the Insurance Surveyor and same was also noted by the Surveyor.
5. Later, Inspection Division of Department of Industry Energy and Labour, Government of Maharashtra vide report dated 23.04.2018 addressed to Senior Police Inspector, Uran Police Station concluded that on 14.03.2018 at 16:30 hours at the Complainant's Warehouse situated at Survey No. 9 Hissa 3 (9/3) Village Veshvi, Tal-Uran, Dist- Raigad electric short circuit happened at the corner of the godown where there was electrical setup and the goods boxes, papers and chemicals stored inside godown got burnt due to electrical sparks.
6. Further, Jawaharlal Nehru Port Trust vide report dated 09.05.2018 which was based on the observations made by the Fire team involved in the fire-fighting at site reported that probable cause of fire that occurred at the Complainant's Warehouse situated at Survey No. 9 Hissa 3 (9/3) Village Veshvi, Tal-Uran, Dist- Raigad was electrical short circuit.
7. While the Opposite Party's investigation was pending, two clients of the Complainant namely M/s Global Exim and M/s Expanded Ploymer Systems Pvt. Ltd. who had their independent Marine Insurance Policies, filed their individual claims with their respective Insurer who hired Independent Surveyors M/s H. Kannan and M/s Proclaim to assess the loss. M/s H. Kannan gave its report on 07.08.2018 and M/s Proclaim gave its report on 31.08.2018. Both the reports concluded that the fire incident that occurred at the Complainant's Warehouse situated at Survey No. 9 Hissa 3 (9/3) Village Veshvi, Tal-Uran, Dist- Raigad on 14.03.2018 happened due to electrical short circuit.
8. The Opposite Party Insurance Company appointed M/s Screen Facts Services Pvt. Ltd. as Forensic Examiner who gave its report on 10.12.2018 wherein it stated that their officials visited the M/s Mudit Roadways Logistics & Warehousing located in the compound of M/s Platinum Logistics, Survey No. 9/3, Cniner Road, Village Veshvi, Taluka Uran, Dist. Raigad. The Forensic Examiner on visit found that there were other Warehouses in the compound one belonging to Platinum and other belonging to Global Farms. The Forensic Examiner for the sake of convenience divided the area of whole Warehouse into 270 segments, by marking on the southern wall alphabet A to R (the distance between two alphabets being 20') and on the western wall numerals 1 to 15 (the distance between the two numerals being 10'). The Forensic Examiner found that the fire occurred in segments A11, A12, A13, A14, A15, B12, B13, B14, B15, C12, C13, C14, C15 and Western half of D12, D13, D14 & D15. In these Segments Chemicals, papers and machines etc was stored. Scrutiny of material showed that chemicals were combustible and flammable. The Forensic Examiner recorded that there were no electric wiring/power/high power drawing equipment in and around the area where the fire incident occurred, ruling out the possibility of fire being caused due to electrical related causes such as short circuit. The Forensic Examiner further recorded that there was 80' gap in the roof between segments E to F. and roofing was done by workers who were carrying the roofing sheet on their heads to the place where they were carrying out the roofing work upto 16.04 hrs. In the report the Forensic Examiner, concluded that during welding at the roof level sparks could have fallen on the adjoining flammable chemicals stored between A and D initiating the fire and concluded that the root cause of the fire incident was negligence on the part of the management in not taking adequate precautions when the construction work was going on, that too in a secured Customs bonded Warehouse where many hazardous chemicals were stored.
9. M/s. J. Basheer & Associates, Surveyors and Loss Assessors Private Limited, who was appointed as Investigator to investigate the Fire Incident occurred on 14.03.2018, vide its Investigation Report dated 11.04.2019 relying on the report of Fire Department, concluded that the fire occurred due to electrical short circuit, which was contradictory to the finding of the Forensic Examiner. The Investigator recorded surprising finding that the Survey Numbers of fire affected Warehouse have not been declared/covered under the Policy. The Warehouse located at the Survey No. 9/3 was not affected by the fire hence, liability of the Opposite Party to pay the claim does not arise.
10. Finally, M/s. J.C. Bhanshali & Co., Surveyor, vide its Survey Report dated 15.04.2019 concluded as under:-
"1. Cause of Fire is due to the negligence on the part of the management in not taking adequate precautions when the construction work was going on;
2. Almost 18000 to 20000 sq. ft. area of the roof of bonded Warehouse which is custom bonded Warehouse was uncovered, i.e., there were no roof sheets at the time of loss, due to which circumstances affected the building insured or containing the insured property were changed, in such a way which increased the risk of loss or damage by insured perils and;
3. The Survey Numbers of the fire affected Warehouse have not been declared/covered under the Policy.
4. Policy covers location at survey No. 9/3, but the office of the insured and a Warehouse located at the Surveyor No. 9/3 were not fire affected and they were safe;
5. Hence, claim under reference is out of the scope of relevant policy & liability under the claim does not arise."
11. The Opposite Party Insurance Company repudiated the claim in respect of Policy No. 17080011170100000734 vide letter dated 15.07.2019 on the ground that "Survey No. 9/3, is completely outside the fire affected Warehouse and that the survey Nos. of the Fire Affected Warehouse are not covered under the Policy"; and also rejected the claims in respect of Policy Nos. 111400461724800000017 & 11140011170100001014 vide letter dated 28.06.2019, relevant portion of which reads as under:
"We are in the receipt of survey report of J.C Bhansali & Co. who has assessed the loss and has observed as No Claim on the following points:-
1. Cause of fire is due to the negligence on the part of the management in not taking adequate precautions when the construction work was going on.
2. Almost 18000 to 20000 Sq.ft. Area of the roof of bonded Warehouse which is custom bonded Warehouse was uncovered, due to which circumstances affecting the building insured or containing the insured property were changed, in such a way which increased the risk of loss or damage by insured perils.
3. Policy covers location at S No.9/3, but the office of the insured and a Warehouse located at the Survey No.9/3 were not fire affected and they were safe.
4. There is no loss at location specified in the fire policy & as there is no tenable claim under fire policy, consequently, there is no valid claim under duty policy.
In view of above we are closing the fire as NO CLAIM.
With further reference to the above at a later date if any fresh ground is found to repudiate your claim we reserve our right to repudiate your claim on the fresh ground so found. "
12. Alleging deficiency in service and unfair trade practice on the part of the Opposite Party Insurance Company, the Complainant has filed the present Complaint with following prayer:-
"a) This Hon'ble Commission be pleased to direct the Opposite Parties to pass and pay the Insurance Claim amount of ₹6,57,55,155/-(Rupees Six Crore Fifty Seven Lakh Fifty Five Thousand One Hundred Fifty Five Only) and additional amount of ₹2,07,12,874/-(Rupees Two Crore Seven Lakh Twelve Thousand Eight Hundred Seventy Four Only) on account of loss Interest value calculated as on 31/03/2020 @ of 21% p.a. on the claim value amounting to ₹6,57,55,155/- to the Complainant from the date of submission of claim. The interest value may revise upward if the date of favourable award goes beyond 30/03/2020
b) Cost of this Complaint is to be provided for.
c) That such further and any other relief as the Hon'ble court may deem fit and proper be allowed to the Complainant."
13. The Opposite Party Insurance Company contested the Complaint by filing its Written Version and raised Preliminary Objections that under Para 25 of the Rejoinder Affidavit the Complainant has averred that the Complaint was filed without the averments being verified by the Complainant himself and in the light of the same the present Complaint was never lawfully instituted hence, liable to be dismissed; Para VI of the Complaint shows that under the heading cause of action it is stated that same would be added later and in the absence of specific paragraph in the Complaint stating cause of action, the Complaint ought to be dismissed; and further submitted that the Claims of the Complainants were rejected in view of the Investigation Report dated 11.04.2019 issued by the Investigator, M/s. J. Basher & Associates as well as the Final Survey Report dated 15.04.2019 issued by M/s. J.C. Bhansali & Co. who opined that the fire was caused during welding of roof as management did not take adequate precaution; Warehouse located at survey No. 9/3 was not affected by fire; and almost 18000 to 20000 sq. ft. of the Warehouse was uncovered which some-how changed the structure of insured property causing increase in risk hence violating general condition 3 of the Insurance Policy, therefore, there is no deficiency in service on their part and prayed that the Complaint be dismissed.
14. Mr. Devesh Tripathi, learned Counsel appearing on behalf of the Complainant Company submitted that the main cause of fire was electric short circuit which is evident from the Independent Government Agencies, like, Fire Department Report, Police Report dated 03.11.2018, Report dated 23.04.2018 issued by Inspection Division of Department of Industry Energy and Labour, Govt. of Maharashtra and Report dated 09.05.2018 issued by Jawaharlal Nehru Port Trust. It was also submitted that two customers of the Complainant namely, M/s. Global Exim and M/s. Expanded Polymer Systems Pvt. Ltd., had their own independent Marine Insurance, who also hired two independent Surveyors namely M/s. H. Kannan & M/s. Proclaim and as per Surveyor Report issued by these two Surveyors, the cause of fire was Electrical Short Circuit. In the Forensic Report dated 10.12.2018 of M/s. Screen Facts services Private Limited, it is recorded that roofing work was carried on till 16:04 and the fire started at 16:30, which is itself contradictory. It was also submitted that as per Lease Agreement dated 04.07.2015, M/s. Platinum Logistics leased out land measuring 1,15,670 sq. ft. to the Complainant which was situated at survey No. 9/3, on which Complainant built-up its Warehouse. The Custom Department after verifying and inspecting the site at Survey No. 9/3 allotted the license for bonded Warehouse to the Complainant. Police Report dated 3.11.2018 and Panchnama dated 15.03.2018 also confirmed that the fire took place at Complainant's site, i.e., Survey No. 9 / 3. Further, the Revenue Authority, who is the Competent Authority to decide the Survey Number of the land and the Tehshildar himself had confirmed that fire took place at Complainant's Warehouse situated at Survey No. 9 / 3. Therefore, the contention of the Opposite Party Insurance Company that fire incident did not take place at the insured location of survey No. 9 / 3 but at some other Survey Number is wrong and misleading. It was also submitted that the two Surveyors appointed by the two customers of the Complainant also confirmed that the fire took place at Complainant's Warehouse identified as Survey No. 9 / 3. It was also submitted that the Opposite Party Insurance Company could not take contradictory stands, i.e., the Fire did not affect the Complainant's Warehouse and secondly the fire was caused due to negligence of the Complainant. It was further submitted that Opposite Party Insurance Company failed to explain as to how the maintenance work increased the risk of loss when it has been ascertained that the cause of fire was electric short circuit. The Opposite Party Insurance Company also failed to explain as to how uncovered space tantamount to change in the structure of the building which increased the risk of loss as that uncovered area was there since the beginning. Therefore, there is no violation of General Condition No. 3 on their part. It was submitted that the Insurance Company has illegally rejected their rightful claim and there is deficiency in service on their part. It was prayed that the Consumer Complaint be allowed in terms of the Prayer Clause of the Complaint.
15. Per contra, Mr. Aditya Kumar, learned Counsel appearing on behalf of the Opposite Party Insurance Company submitted that as per findings of the Surveyor and Investigator the risk location was not fire affected. It was further submitted that extensive repair work including welding work was going on at the Warehouse without prior sanction of Insurer, which clearly is manifest breach of Condition No. 5 of the General Condition. The fire incident occurred due to the said welding work as reported by the Forensic Investigator. There was clear negligence on the part of the Complainant that there was storage of hazardous chemicals at the Warehouse when the welding work was going on and the root cause of fire was sparks falling on flammable chemicals that were stored in the Warehouse. It was further submitted that the reliance placed by the Complainants on the reports of Fire Department is clearly misplaced on the ground that firstly the Report is only prepared by the Fire Department in case any damage caused by the Fire personnel during fire-fighting operation and thus, the Fire Report was not mandated and secondly, in the Report it is clearly mentioned that the it is being issued at the specific request of the Complainant, therefore, the same is neither conclusive nor binding. The Report dated 23.04.2018 issued by Maharashtra Electricity Department is completely illegible and the translated copy is replete with obvious errors and thus no reliance can be placed upon the same. It was further submitted that the claims of the Complainant were rejected in view of the Investigation Report dated 11.04.2019, the final Survey Report dated 15.04.2019 and the Forensic Investigation Report dated 10.12.2018, in which it was unanimously concluded that the claims preferred by the Complainant were not maintainable. Therefore, there is no deficiency in service on their part and it was prayed that the Consumer Complaint filed by the Complainant Company be dismissed.
16. Relying on the Report of the Investigator, the learned Counsel for the Opposite Party Insurance Company, submitted that the risk location, i.e., Survey No. 9/3, Village Veshvi, Tal-Uran, Dist- Raigad, has not been affected by the fire at all. Relying upon map received from the office of Tehsildar and investigator's report it was submitted that the fire occurred at Survey Nos. 6/2 to 6/8, 7/1A, 7/1B, 7/4A, 7/4B, 7/5 & 7/6A, 9/4B, 9/6, 9/7, 9/10, 9/11 & 9/12 and as per the Policy documents risk location is Survey No. 9/3. Learned Counsel for the Opposite Party further submitted that the Complainant in its Rejoinder has admitted the above stated fact.
17. Learned Counsel for the Complainant countered this argument by submitting that the Compound owned by M/s Platinum Logistics is identified by Survey No. 9/3 and this survey contains 40 Sub Survey Nos. and this fact came to the knowledge of the Complainant after the Opposite Party Insurance Company mentioned the same in their Reply and this fact was confirmed by the owner of M/s Platinum Logistics but this does not take away the fact that fire occurred at the Complainant's Warehouse identified by Survey No. 9/3, which was insured by the Opposite Party Insurance Company.
18. I have heard Mr. Devesh Tripathi, learned Counsel appearing on behalf of the Complainant, Mr. Aditya Kumar, learned Counsel appearing on behalf of the Opposite Party Insurance Company, perused the material available on record and have given thoughtful consideration to the various pleas raised by them.
19. As far as Preliminary Objection that the Complaint was not verified by the Complainant is concerned, a perusal of para 25 of the Rejoinder would show that the Complainant stated that the Complaint was filed without the averments being verified by the Complainant himself. Complainant further adds that the copy of original Complaint was given to him by the previous set of lawyers that after order dated 22.10.2022 was passed by this Commission whereby this Commission admitted the matter. The Complainant further stated that the in the Complaint originally filed, important facts were missing. Thereafter, the Complainant filed I.A No. 1437/2021 seeking permission to amend the Complaint as the Complainant was desirous to bring on record some additional facts but same was dismissed vide order dated 15.02.2021 as the Complainant did not state additional facts which it was willing to bring on record. During the hearing, learned Counsel of the Complainant further sought permission to file another amendment Application but the said request was not granted as the Complainant was free to take appropriate steps. Thereafter, on 08.03.2021 the Complainant filed Application for filing additional documents and also filed Rejoinder affidavit and evidence by way of affidavit to support the contentions already raised in the Complaint filed and additional contentions and documents raised later. In view of the above discussion, the contention of the learned Counsel for the Opposite Party that the Complaint should be dismissed merely on the ground that Complaint was filed without verification cannot be accepted. The averments of the Complainant were duly supported by the Rejoinder Affidavit as well as Evidence by way of Affidavit therefore, dismissing the Complaint without considering the merits, merely on the ground that contents of Complaint as originally filed were not verified would tantamount to highly technical view and against the interest of justice.
20. Another objection taken by the Opposite Party is that under the heading Cause of Action, it is stated that same would be added later and in the absence of specific paragraph in the Complaint stating cause of action, the Complaint ought to have been dismissed. The said objection raised by the learned Counsel for the Opposite Party cannot be accepted as perusal of all the contents of the Complaint, Rejoinder and Evidence by way of Affidavit, clearly highlight the cause of action i.e. rejection of the Complainant's insurance claim by the Opposite Party. Therefore, this contention of the Opposite Party is also rejected.
21. There are two major issues involved in the present case - firstly, whether the Complainant's Warehouse located at Survey No. 9 Hissa 3 (9/3) Village Veshvi, Tal-Uran, Dist- Raigad was insured by the Opposite Party; and secondly, what was the cause of fire incident that occurred on 14.03.2018.
22. A bare perusal of the records shows that compound of M/s. Platinum Logistics have 3 Warehouses namely M/s MSA Global Logistics Pvt. Ltd., M/s SS Supply Chain Solutions Pvt. Ltd. and that of the Complainant's. M/s Platinum Logistics has licensed/leased the property to the above Warehouses. It is seen from the lease/license Agreement of above Warehouses that all three of them have been identified by the same Survey No. i.e. 9/3. The Complainant explains the same in its Rejoinder by stating that M/s Platinum Logistics is a compound measuring 1,15,670 sq. feet and is identified by the Survey No. 9/3 which is situated at entry/exit gate. The whole Survey No. 9/3 comprises 40 sub-Survey Numbers but the Owner of M/s Platinum Logistics identifies the place with Survey No. 9/3 and that is why he leased the land to three different Warehouses with same Survey No. but allotted them different plots of land. This explanation is plausible. The Complainant further pointed out that this piece of information was received by them after it was pointed out by the Opposite Party Insurance Company in their Written Statement.
23. A perusal of the Policy documents shows that location address which was insured was "Mudit Roadways, Survey No. 9/3 Opp Forces CFS, Chirner Road, Veshvi Village, Uran, MH1369, Mh 4000702". This shows that the location insured was property identified as M/s Mudit Roadways situated on Survey No. 9/3. This is not the Opposite Party Insurance Company's case that the Complainant's Warehouse M/s Mudit Roadways has not been affected by the fire. Their argument suggests that the Complainant gave its address as Survey No. 9/3 but after going through map received from the office of Tehsildar address of the Complainant is not Survey No. 9/3. This argument is technical in nature and it appears it has been taken only to avoid the claim of the Complainant because no malafide can be attributed to the Complainant by saying that the Complainant gave different address other than the address where his Warehouse was located. The Complainant gave address on the basis of Lease agreement. The Warehouse of the Complainant was physically verified by the Customs Authorities as per Regulation 3 of Public Warehousing Licensing Regulations, 2016 and license for Warehouse was given at location 9/3 Opp Forces CFS, Chirner Road, Veshvi Village, Uran, MH1369, Mh 4000702. The Complainant was awarded telephone connection as well as Electricity connection on the same address. Police Report as well as Police Panchnama ascertained that fire accident took place at the Complainant's Warehouse identified by Survey No. 9/3. Moreover, Tehsildar on whose map the Opposite Party is relying upon, vide letter dated 24.02.2018 asked the Complainant to remove chemical powder and debris. The said letter was addressed to the Complainant at Survey No. 9/3 Opposite Forces CFS, Chirner Road, Veshvi Village, Uran, MH1369, Mh 4000702. Moreover, the Opposite Party Insurance Company themselves have sent rejection letters to the Complainant at address Survey No. 9/3 Opp Forces CFS, Chirner Road, Veshvi Village, Uran, MH1369, Mh 4000702. Further, two clients of the Complainant namely, M/s Global Exim and M/s Expanded Polymer Systems Pvt. Ltd. who had stored their goods at the Complainant's Warehouse has their own independent Insurance Policies and same has been processed by their respective Insurers without taking hyper technical objection that he place of fire was not Survey No. 9/3.
24. The Complainant's Warehouse is being identified at the said location by Customs Department, Police, Fire Department, Tehsildar, Telephone and Electricity Companies. The fact of fire being caused has also been verified and corroborated by the reports of several independent Government Authorities. Therefore, the stand of the Opposite Party Insurance Company cannot be accepted merely because the Sub Survey Number is not mentioned by the Complainant. The Opposite Party Insurance Company cannot run away from their responsibility by taking a hyper technical stand. It is not the Opposite Party's case that the fire has not occurred at all and from the perusal of the material available on record it cannot be said that fire incident has not occurred at the Complainant's Warehouse which was insured by the Opposite Party Insurance Company. Had this been the case there would not have been any reason for the Opposite Party Insurance Company to investigate the cause of fire. The Opposite Party cannot take contradictory stands. On one hand Opposite Party is contending that fire has not affected the insured area and on the other hand they went ahead investigated the cause of fire.
25. In view of above findings, it is held that the Opposite Party Insurance Company insured the Complainant's Warehouse namely M/s Mudit Roadways situated on 9/3 Opp Forces CFS, Chirner Road, Veshvi Village, Uran, MH1369, Mh 4000702 and the issue is decided in favour of the Complainant.
26. In respect of Cause of Fire, learned Counsel for Opposite Party Insurance Company relying on the reports of Surveyor, Forensic Examiner and Investigator argued that there was negligence on the part of the Complainant in storing copious amounts of hazardous chemicals at the Warehouse when extensive repair and welding work was underway and the root cause of the fire was sparks falling on flammable chemicals that were stored in the Warehouse. Per contra, learned Counsel appearing on behalf of the Complainant argued that the root cause of fire was electric short circuit.
27. Perusal of the records shows that as per Police Report dated 03.11.2018 issued after investigating incident of fire reported under FIR No. 03/2018, the cause of fire was short circuit. This finding is corroborated by the Report dated 23.04.2018 of Inspection Division of Department of Industry, Energy and Labour of Government of Maharashtra and Report dated 09.05.2018 of Jawaharlal Nehru Port Trust.
28. Moreover, as recorded above two clients of the Complainant namely, M/s Global Exim and M/s Expanded Polymer Systems Pvt. Ltd. who had stored their goods at the Complainant's Warehouse have their own independent Insurance policies and same has been processed by their respective Insurers. The Surveyor appointed by their Insurers namely M/s H. Kannan and M/s Proclaim vide their Survey Reports dated 07.08.2018 and 31.08.2018 concluded that cause of fire was electric short circuit.
29. It is further observed that the report dated 10.12.2018 of Forensic Examiner M/s Screen Facts and Report dated 11/04/2019 of M/s J. Basheer & Associates are contradictory to each other as the Forensic examiner's Report says that cause of fire is negligence and repair work whereas Investigator's Report concludes that cause of fire was short circuit. The Opposite Party's Surveyor in its report dated 15.04.2019 combined the findings of both Forensic Report and the Investigator's Report but only recorded findings which favoured the Opposite Party Insurance Company.
30. The finding in the Forensic Report that there was no electrical wiring drawing equipment in and around the area where fire incident occurred is wrong as the same is contradicted by the Report dated 23.04.2018 of Inspection Division of Department of Industry Energy and Labour, Government of Maharashtra as per which fire was caused due to Short Circuit in the electrical setup at the corner of the Godown. Learned Counsel for the Opposite Party argued that reliance on the Report of the Fire Department ought not be placed as same is not conclusive as it says that cause of fire may be electrical short circuit and as per Section 27(2) of the Maharashtra Fire Prevention and Life Safety Measures Act, 2006 and Rule 24(3) of Safety Measures Rules, 2009 the Report of Fire Department is legally not binding. This argument of Opposite Party could have been accepted had Report of Fire Department been the only evidence on record to suggest that cause of fire was short circuit but Report of Fire Department is corroborated by the findings of Report dated 03.11.2018 of Police, Report dated 23.04.2018 of Inspection Division of Department of Industry Energy and Labour, Government of Maharashtra and Reports of Independent Surveyors M/s H. Kannan and M/s Proclaim.
31. Moreover, as per Forensic Report though the last recorded incident of welding noted by the Forensic Examiner was at 11:54:27 and as per Forensic Examiner the roofing work was carried at till 16:04, it was somehow concluded by Forensic Examiner that the fire incident which occurred at 16:30 in Segments A-D was due to welding work in segments E-F which was at least 20 feet away from the nearest point of incident. The investigation conducted appears to be done in a shoddy manner with the objective to arrive at pre-determined outcome. Forensic Examiner only on the basis of circumstantial evidence inferred that fire occurred due to welding work. In my view, such inference seems weak particularly in the presence of Reports given by independent Government Authorities/Departments.
32. Learned Counsel for the Opposite Party Insurance Company further argued that it is a settled law that well-reasoned and detailed report of loss Surveyor ought to be given highest weightage but in view of contrary findings recorded by not one but several Independent Authorities that cause of fire was electric short circuit it cannot be said that Surveyor's Report is well reasoned and ought to be given more weightage than the other Reports particularly when the reports are given by independent Government Departments and also two other independent Surveyors appointed by M/s Global Exim and M/s Expanded Polymer Systems.
33. In view of above discussion it can be concluded that the main cause of fire was electric short-circuit. Even otherwise, a reference can also be made to the decision of the Hon'ble Supreme Court in "Canara Bank v. United India Insurance Co. Ltd., Reported in (2020) 3 SCC 455" in which it has been held as under:-
"13. As far as this issue is concerned, both the State Commission and the National Commission have come to the conclusion that the fire was an accidental fire and occurred due to a short circuit. These are pure findings of fact which, in our view, cannot be challenged in these proceedings. However, since lengthy arguments were addressed by Shri P.P. Malhotra in this behalf, we shall deal with the same. At the outset, we may note that the electrical inspector, the police investigation team and the forensic science laboratory (FSL) have all come to the conclusion that the fire took place due to a short circuit. The concluding portion of the report of the FSL reads as follows:
"From the above examination, the following observations have been made:
1. Presence of combustible materials like thermocol (which are used to insulate the walls) pillars, wooden partitions and the grains stored inside the building could have enhanced the spread of fire.
2. The congested space in the building might have accelerated the smouldering fire.
3. The fire might have originated at the sixth floor front side of the building. But it was not possible to locate the exact place of origin of fire since the complete building was involved in fire.
4. An electrical short circuit may have initiated the fire."
14. The Insurance Company relies upon the findings given by a company, namely, Truth Labs and those of Rank Surveyors Pvt. Ltd., which read as follows:
"Based on a thorough and in-depth inspection of the incident site, forensic examinations, field investigations, documentary evidence analysis and personal evidence obtained, it is concluded that the fire occurred in M/s Sree Devi Cold Storage, Billary on the intervening night of 13-1-2014/14-1-2014:
(a) Was not due to spontaneous combustion on account of bacterial/chemical fires.
(b) Was not due to electrical failure caused by short circuit.
(c) And was on account of extraneous ignitable fire accelerants such as kerosene used deliberately for ignition, initiation, propagation and burning of stocks in the cold storage through human intervention.
(d) Based on the motive, means and opportunity to carry out such malicious acts the possibility of the involvement of management in such a nefarious act cannot be ruled out."
15. We may note that it is not disputed that in the construction of the cold store, the temperature was maintained by insulating the walls of the cold store. Bitumen (coal tar) and thermocol were used for providing insulation. FSL found that in a fire which takes place in a building where such material is used for construction, hydrocarbons would obviously be present. On the other hand, M/s Truth Labs mainly relied upon the presence of hydrocarbons to come to the conclusion that the fire had not occurred spontaneously and on account of electrical short circuit but occurred on account of extraneous ignitable fire accelerants such as kerosene. The conclusions of M/s Truth Labs were based on some inspection and chemical analysis carried out by a team headed by Dr R. Srinivas. Admittedly, this report of Dr R. Srinivas was never furnished to the parties nor was placed before the State Commission. Interestingly, when Mr G.V.H.V. Prasad, Director of M/s Truth Labs was put a specific query whether the walls of the ground floor and the top floor and the inside portion of the cold store along with 169 pillars were constructed by sandwiching bitumen and thermocol between the concrete in order to raise the level of insulation, he replied that "he was not aware of how the cold storage was built". This clearly shows the shoddy manner in which M/s Truth Labs conducted the investigation. There can be no proper investigation of a fire if the investigating agency does not even try to find out what is the nature of construction of the building which has been destroyed in the fire. M/s Truth Labs has clearly stated that the observation that fire took place on account of extraneous ignitable fire accelerants, is based on the chemical analysis report which shows presence of hydrocarbons in the debris. It is apparent that M/s Truth Labs, for reasons best known to it, did not analyse the material used for construction because if it had done so, it would have realised that hydrocarbons would be present when thermocol or bitumen are burnt. Thermocol is basically a rigid plastic foam material which is derived from petroleum and natural gas by-products. Bitumen is a semi-solid hydrocarbon product produced from crude oil. Both thermocol and bitumen are derivatives of petroleum products and hence are hydrocarbons by their very nature. Therefore, presence of hydrocarbons would be natural when a fire takes place. The presence of hydrocarbon could not lead to a conclusion that kerosene oil had been used to ignite the fire.
16. The National Commission has also dealt in detail with this issue and has come to the conclusion that M/s Truth Labs visited the burnt cold store on two occasions and collected samples on both the occasions. It, however, decided to send 12 samples collected only in the second visit for analysis. Interestingly, the controlled samples were collected from a plastic bag containing (fresh unaffected) chillies found in the burnt stock of the affected premises. The controlled samples did not show presence of hydrocarbons and hence, the assumption that the presence of hydrocarbons in the remaining samples was not relatable to thermocol and tar. There is no explanation why the samples taken on the first visit were not sent for analysis. It is also difficult to believe that in a building which has been totally gutted in a fire, there would be one plastic bag containing (fresh unaffected) chillies found in the burnt stock. It is possible that these unburnt chillies may have been introduced later on. Therefore, we cannot place any reliance on the report of M/s Truth Labs.
17. In any event, neither in the report of M/s Truth Labs nor in the other reports by the Insurance Company is there anything to show that the insured had set the cold store on fire. Whether the fire took place by a short circuit or any other reason, as long as insured is not the person who caused the fire, the Insurance Company cannot escape its liability in terms of the insurance policy. We reject the contention of the Insurance Company that the fire was ignited by the use of kerosene and hence it is not liable."
34. In view of above discussion and respectfully following the principles laid down by the Hon'ble Supreme Court in "Canara Bank vs. United India Insurance Company (supra)" the Opposite Party Insurance Company is liable to settle the claim of the Complainant Company.
35. Learned Counsel for the Opposite Party Insurance Company contended that the Complainant has violated General Condition 3 of the Insurance Policies. The Complainant in response to question No. 21 posed by the investigator admitted that there were issues of water leakage from the roof of the Warehouse premises of the Complainant for the past 2 years, and repair work was being carried out by the owner. He further submitted that aforesaid repair work on the insured property was done without seeking prior sanction of the OP, violating General Condition 3. General Condition 3 states that if the Insured have made some alteration to the insured structures and if in the nature and circumstances insured structure is alerted in such a way to increase the risk of loss or damage by insured perils and no sanction is obtained for such changes then the Insurer shall not be responsible for the damage caused. Perusal of the General Condition 3 shows that if alteration of the insured structure is of such an extent that it increases the risk insured then it becomes necessary for the Insured to get the prior sanction of the Insurer but in the instant case only repair work of the roof had been undertaken. The repair work or for the matter putting roof over some part of the Warehouse cannot be considered as alteration of such an extent that increases the risk insured particularly, when the cause of fire has been established to be short circuit and not the sparks from the welding.
36. From the records it can be ascertained that as per Regulation 3 of the Public Warehousing Licensing Regulation, the Customs Authority has granted license to the Complainant Company to run the Warehouse only after ensuring that the Warehouse is safe enough to store the goods. Therefore, it cannot be said that the Complainant was negligent in storing goods, chemicals etc. which were of highly combustible and flammable in nature.
37. Learned Counsel for Opposite Party Insurance Company further contended that investigator in its Report had observed that there were several statutory approvals / NOCs which were not available with the Complainant. He contended that the owner of the Warehouse only had provisional NOC from the Fire Department at the relevant time though he had applied for the final NOC. He further contended that the Complainant neither had approval qua electrical wiring drawing nor had approval from Town and Country Planning Department. In response, learned Counsel for the Complainant submitted that the abovementioned grounds taken by Opposite Party Insurance Company are additional grounds which were not part of the rejection letters therefore, the Opposite Party cannot be allowed to travel beyond the points taken in the rejection letter. From the perusal of the records it can be said that the Opposite Party Insurance Company is trying to defend its case by relying on additional grounds. The grounds that final NOC from the Fire Department was not available, no approval for electric wiring and town planning department, are not part of rejection letters.
38. Per contra, learned Counsel for the Complainant submitted that the owner of the Warehouse has provisional NOC from the Fire Department and has already applied for final NOC and has also made the payment. The NOC is pending at the end of the Fire Department. Regarding approval from Town and Planning department Learned Counsel of the Complainant submitted that landowner has taken approval from the Gram Panchayat and regarding electrical wiring layout the learned Counsel submitted that same has been approved though drawing wasn't available with the landowner as same was constructed by the contractor. The above explanation given by the Complainant is acceptable particularly when the Opposite Party Insurance Company has not relied upon said grounds in the rejection letters.
39. Even otherwise, I do not find any merit in the above contention of the learned Counsel for the Opposite Party Insurance Company in view of the decision of the Hon'ble Delhi High Court in "Krishna Wanti v. Life Insurance Corporation of India" [1999 SCC Online Del 898], wherein it has been held that if the letter of repudiation did not mention an aspect, the same could not be taken as a stand when the matter is decided, This view has been approved by the Hon'ble Supreme Court in "Galada Power & Telecommunication Ltd. Vs United India Assurance Co. Ltd." (2016) 14 SCC 161 as also in "Saurashtra Chemicals Limited Vs National Insurance Company Limited (2019) 19 SCC 70."
40. It is not in dispute that the Complainant bought three Insurance Policies from the Opposite Party Insurance Company bearing Policy numbers 17080011170100000734, 11140011170100001014 and 11140046172480000017 for covering the risk on the account loss due to fire accident. The Complainant submitted a total claim for ₹6,57,55,155/-. The Opposite Party Insurance Company rejected the claim of the Complainant on the basis of the report submitted by the Surveyor, Forensic Expert and Investigator but neither challenged quantum of the claim in their repudiation letters nor pressed any arguments impugning the quantum during the final hearing.
41. The Surveyor's Report is not the final word and it is not binding upon the Insured or Insurer. A reference can be made to the Judgment passed by the Hon'ble Supreme Court in "New India Assurance Co. Ltd. v. Pradeep Kumar, (2009) 7 SCC 787" in which it has been held as under:-
"21. Section 64-UM(2) of the Act, 1938 reads:
64-UM. (2) No claim in respect of a loss which has occurred in India and requiring to be paid or settled in India equal to or exceeding twenty thousand rupees in value on any policy of insurance, arising or intimated to an insurer at any time after the expiry of a period of one year from the commencement of the Insurance (Amendment) Act, 1968, shall, unless otherwise directed by the Authority, be admitted for payment or settled by the insurer unless he has obtained a report, on the loss that has occurred, from a person who holds a licence issued under this section to act as a Surveyor or loss assessor (hereafter referred to as 'approved Surveyor or loss assessor'):
Provided that nothing in this sub-section shall be deemed to take away or abridge the right of the insurer to pay or settle any claim at any amount different from the amount assessed by the approved Surveyor or loss assessor."
The object of the aforesaid provision is that where the claim in respect of loss required to be paid by the insurer is ₹20,000 or more, the loss must first be assessed by an approved Surveyor (or loss assessor) before it is admitted for payment or settlement by the insurer. The proviso appended thereto, however, makes it clear that insurer may settle the claim for the loss suffered by insured at any amount or pay to the insured any amount different from the amount assessed by the approved Surveyor (or loss assessor).
22. In other words although the assessment of loss by the approved Surveyor is a prerequisite for payment or settlement of claim of twenty thousand rupees or more by insurer, but Surveyor's report is not the last and final word. It is not that sacrosanct that it cannot be departed from; it is not conclusive. The approved Surveyor's report may be the basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured."
42. For the reasons stated hereinabove and respectfully following the principles laid down by the Hon'ble Supreme Court in Judgments quoted above, I am of the considered view that deficiency in service on the part of the Opposite Party Insurance Company is writ large while rejecting the rightful claim of the Complainant. Consequently, the present Consumer Complaint is partly allowed and the Opposite Party Insurance Company is directed to settle the claim of the Complainant Company by paying a sum of ₹6,57,55,155/- (Rupees Six Crore Fifty Seven Lakh Fifty Five Thousand One Hundred Fifty Five Only) towards loss suffered by it alongwith interest @9% p.a. from the date of repudiation of the claim till realisation within 8 weeks from today, failing which the interest of interest will increase from 9% p.a. to 12% p.a. The Opposite Party Insurance Company is also directed to pay ₹50,000/- towards cost of litigation to the Complainant.
......................J R.K. AGRAWAL PRESIDENT