National Consumer Disputes Redressal
New India Assurance Co. Ltd. vs Vishnu Chemicals Pvt. Ltd. on 3 October, 2005
Equivalent citations: III(2007)CPJ443(NC)
ORDER
B.K. Taimni, Member
1. Appellant Insurance Company was the opposite party before the State Commission, where the respondent had filed a complaint alleging deficiency in service on the part of the appellant.
2. Undisputed facts of the case are that the respondent company / complainant is engaged in manufacturing of chemicals and had insured their material in the factory and godown covering risk of fire, riots, etc. for an amount of Rs. 50,00,000 valid from 20.10.1996 to 19.10.1997, for which the policy was live and existing. It is also not disputed that there was a loss caused to the stock belonging to the respondent / complainant on the night of 26.11.1996 resulting from collapse of mother liquor storage tank. After the incident, matter was reported to the appellant by way of phonogram on 27.11.1996 followed by the letter dated 29.11.1996. The matter was reported to the police on 27.11.1996 also. Since it was an 'Excisable' item, matter was also reported to the Excise Department. A claim was also preferred on 5.12.1996 for the loss. Upon receiving the report of this episode, a Surveyor was appointed who carried out a 'Preliminary' spot survey and, later on, a detailed svirvey was also carried out. Based on the report of the Surveyor, the claim was repudiated vide letter dated 10.10.1997, on the ground that the loss is not covered under the terms and conditions of the policy. It is in these circumstances, that a complaint was filed before the State Commission, who after hearing the parties and perusal of material on record, allowed the complaint against both the policies -one obtained from the appellant and the other from the National Insurance Company, with the direction that both the Insurance Companies, including the appellant, shall "assess the damage in accordance with the policy condition and pay the same to the complainant with interest @ 9% p.a. from the date of the filing of the complaint till the date of payment". This exercise shall be done within a period of 3 months from the date of the order, i.e., 10.9.2003 along with cost of Rs. 5,000 in respect of each complaint relating to each of the policies taken from the two different insurance companies". Aggrieved by this order of the State Commission, only the New India Assurance Company has filed an appeal before us.
3. We heard the learned Counsel for both the parties at length and perused the material on record. It is argued by the learned Counsel for the appellant that as per terms of the policy this peril is not covered. The State Commission, despite material on record, erred in concluding that there is 'overwhelming evidence in support of the fact that the mother liquor storage tank collapsed as a result of the excavator loader while reversing hitting one of the columns of the tank. It is also his case that the complainant has been frequently shifting his version as to the cause of loss as is evident from the material on record. He drew our attention to the correspondences as also two reports of the Surveyor which overwhelmingly show that how the complainant has been shifting his version on the point of cause of collapse of mother liquor storage tank, in view of which the State Commission erred in concluding that the overwhelming evidence is in favour of the complainant which is not sustainable in view of the material on record, hence appeal needs to be allowed.
4. On the other hand, it is argued by the leanrned Counsel for the respondent/ complainant that the order of the State Commission, cannot be faulted as this has been the repeated stand before the Insurance Companies, as also before the Excise Department as also before the police that it was on account of the excavator loader hitting one of the columns of the mother liquor storage tank which resulted in the stated loss. Learned Counsel for the respondent also relied upon the evidence statement recorded by the driver of the excavator as also the report of the Excise Department, which amply go on to confirm that the collapse was on account of the excavator hitting one of the columns resulting in collapsing/falling down mother liquor storage tank resulting in the said loss.
5. After hearing the learned Counsel for both the parties, we find that all these documents are not disputed, hence we go on to refer to them chronologically. Vide phonogram dated 27.11.1996 at 3.30 a.m., the matter was reported to the appellant, which states "mother liquor storage tank blasted in our factory". In their report to the police on 27.11.1996, it is stated that "Storage tank is collapsed at 10.30 p.m. on 26.11.1996" vide letter dated 29.11.1996, sending a formal intimation by way of letter it is stated "Storage Tank collapsed in our factory". There is no material on record, as to in what form, the matter was reported to the Excise Department though their report dated 29.11.1996 on record. In their 'Fire Claim Form' prepared and submitted on 5.12.1996 what is stated is "cause exactly not known may be due to impact of hitting of excavator or mischief of labour". It is not in dispute immediately after getting information of incident in the morning of 27.11.1996, the appellant appointed the surveyor, who visited the spot on 27.11.1996. In its report dated 9.12.1996, it stated:
5-1. During the survey, the factory of the insured at Gaddapotharam on 27.11.1996 morning, the insured Shri Ch. Krishna Murthy stated verbally, that the shift duty personnel heard the heavy noise in the open yard of the factory on 26.11.1996 between 10.30 p.m. and 11.00 p.m. All the workers and the in-charge supervisor rushed out of the factory to the open yard of the factory and noticed the storage tank of liquid sodium bichromate collapsed under its own weight.
5-2. I have examined the collapsed storage tank immediately on my arrival at the factory on 27.11.1996 morning at 09.45 hours and found that one of the MS chanel patched up leg (out of 4 legs) got broken under its own weight and the tank collapsed with the contents.
6. In the light of all these, in our view, the overwhelming evidence would be that the respondent complainant has not been sure about the cause of falling down of mother tank. The above chronology of material on record, mostly of the complainant himself, does not really help the complainant. Even if we presume that they did not come to know the cause of collapse in the night of 26.11.1996, though we find it difficult to believe that the tank collapsed and no effort is made to ascertain the cause of collapse. But in our view, they should have really known on 29.11.1996 when they formally wrote a letter to the appellant as to the cause of the coming down of the mother tank. Only thing mentioned in this letter is "Storage tank collapsed in our factory on 26.11.1996 at 11 O'clock in the night". We find it somewhat difficult to believe that despite passage of 3 days and a substantial loss caused to the complainant; yet he is unable to tell the appellant in clear terms the cause of loss. The case further is clouded by the fact that as late as 5.12.1996 in the Fire Claim Form they are not sure at all, as to what is the cause of the coming down of mother tank? The wording used is "may be due to impact of excavator of latter or mischief of labour" leaving us with a nagging thought that with passage of time, and perhaps after getting a feel of what was in the mind of the Surveyor, an oblique effort is made to improve their case by bringing their case within the terms of the policy.
7. There is no dispute that as per terms of the policy the loss is covered if it is caused by 'lighting', 'fire', 'explosion', and "impact of any mil road vehicle or animal", among others. It is clear from the reading of the policy that if it was caused by collapse of its own weight then it would not have been covered by the terms of the policy. Even though the first report sent through phonogram speaks tank 'blasted'; but perhaps realizing its implication and lack of evidence, the complainant meekly withdrew this word and never used these words again.
8. When we see the Surveyor's two reports on record which were within the knowledge of the respondent. In the first report, it has been categorically stated after the spot survey on 29.11.1996 that "the insured is not sure of the cause of accident and he may try to change his cause of accident...(emphasis supplied)" This remark of the Surveyor is after the visit of the spot on 27.11.1996 and the complainant starts changing his stand on the cause of collapse only thereafter.
9. If we see the arguments advanced by the learned Counsel for the respondent as also material on record, we see the apprehension of the Surveyor "may try to change cause of accident..." taking shape. The respondent complainants wants to buttress their case by heavily relying upon the account of alleged eye-witness [produced before us in the form of written submission R-5 (P-60)]. There is no dispute that what is produced as a document is the stated "eye-witness account" of Mr. V. Uma Maheshwara Rao, Sr. Process Operator, who also gave his statement as an eye-witness to the Surveyor. If we see para VII of the Surveyor report dated 15.3.1997, as per the purveyor the same eye-witness does not even remotely mention cause of collapse of mother tank being hit by the excavator while reversing. No affidavit either of the driver of the excavator or of the stated eye-witness V. Uma Maheshwara Rao, has been produced. It is also pertinent to note that the eye-witness report brought on record as Annexure R-5 is undated and does not bear the signature of the witness as the seal bears the name of the Managing Director. In the absence of any affidavit of this eye-witness or for that matter, of the driver, and keeping in view the report of the Surveyor indicating suspicion on the point that the complainants can now make effort to improve their case, we are in no position to attach any importance to the report of alleged eye-witness or for that matter of the driver's statement before the police.
10. If we see the detailed report we find that in the worst case scenario, the loss could be stated to be on account of collapse of the mother tank on its own weight. We see merit in the two observations of the Surveyor beside others. Firstly, that if the accident was caused at the time of reversing of excavator hitting one of the columns made of mild steel, then the contents of the tank should have fallen over the excavator but there is no evidence to this effect, and secondly, we notice that the mother tank was standing on 4 legs of made of mild steel. The capacity of the mother tank was 36 tonnes and perhaps at the time of collapse, contents were to the extent of 30 tonnes. There is no material on record as to what was the speed of the excavator when it hit one of the legs to bring down the mother tank. It was within the factory premises and the excavator was reversing. It is common knowledge that when the vehicle reverses the speed is always much less than the forward speed. The columns were made of steel and not of clay or soft material with a capacity to carry a load of 36 tonnes. There is no material on record to show us the impact of excavator hitting any column and the 'fall-out' of this. The best case scenario as brought out by the Surveyor in its final report and duly supported by the letter of clarification dated 15.7.1997 is that "the cause of loss could be on account of impact to the storage tanks legs, by which the tank did not collapse immediately. Insured should not have continued storage of material in the tank whose legs become weak. The storage of stock in the tank whose legs were weak due to earlier impact should have further weakened, the supporting legs should have lead to its collapse". The net result of all this is we find, that overwhelming evidence is against the complainant and enough material is on record by way of the complainant's own written record as also the Surveyor's report that this was a case of collapse on account of natural weight of the mother tank. What perhaps could have saved the day for the complainant would have been the affidavit by way of evidence of the driver of the excavator, which was not done. His statement recorded before any third party is of no consequence to this. In fact, the ground reality is as per material on record that the driver disappeared and reappeared only in mid of December 1996. In our view, the State Commission has gone wrong in jumping at the conclusion that 'the overwhelming evidence placed by the complainant cannot be ignored preferring the possible cause of break down of the tank in view of the condition of the legs...." : In our view, the State Commission erred in not seeing all other material on record as evidenced and referred by us earlier, that the overwhelming evidence is in favour of the appellant.
11. In view of above, we find lot of substance / merit in the grounds of appeal and arguments advanced by the learned Counsel for the appellant in view of which we allow the appeal and setting aside the order of the State Commission qua the appellant only. The complaint filed against the appeal also stands dismissed. In compliance of our order dated 29.1.2004, the appellant had deposited Rs. 5,00,000 with the Registry of this Commission. The Registry is directed to release the deposited amount of Rs. 5,00,000 along with accrued interest as also the amount deposited by them for filing this appeal as per law.
12. The appeal is allowed in above terms.