National Consumer Disputes Redressal
M/S Lokmangal Sugar Ethinol & ... vs M/S Oriental Insurance Co. Ltd., on 27 February, 2026
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
JUDGMENT PRONOUNCED ON: 27/02/2026
CONSUMER COMPLAINT NO, 113 OF 2014
With
IA/10550/2019 (Interim Relief)
M/s Lokmangal Sugar Ethanol & Co-Generation Industries Ltd., Office at: Lokmangal
House, 8536A/11, Murarji Peth, Near Poona Naka, Solapur-413001.
...... Complainant
Versus
M/s Oriental Insurance Co. Ltd., Office At: A-25/27, Asaf Ali Road, New Delhi - 110002.
...... Opposite Party
BEFORE:
HON'BLE MR. JUSTICE A.P SAHI, PRESIDENT
HON'BLE MR. BHARATKUMAR PANDYA, MEMBER
For The Complainant Mr. Prashant Kenjale, Advocate
For The Opposite Party Mr. P.K. Seth, Advocate
Ms. Alana Mohammed, Advocate
Ms. Kanchan Sharma, Advocate
JUDGEMENT
PER HON'BLE MR. BHARATKUMAR PANDYA, MEMBER
1. Heard Mr. Prashant Kenjale, Advocate for the Complainant and Mr. P.K. Seth, Advocate, for Opposite Party. The present consumer complaint arises out of alleged deficiency in service and unfair trade practices with regard to an insurance claim allegedly committed by M/s Oriental Insurance Company Limited (hereinafter "OP"). The Complainant had taken a Standard Fire and Special Perils Insurance Policy from the OP Oriental Insurance Company Limited for a sum insured of ?324.39 crores covering Stock, Plant, Fire Basic Cover and Earth Quake Cover for the period from 28.07.2011 to 18.07.2012. On 21.04.2012, a major fire broke out in the Complainant's plant premises. As per the Complainant, the fire originated in the cable trench below the control panel, which spread and severely damaged the control room, cables, panels, and related accessories. As a result of this incident, substantial damage also occurred to the turbine Page 1 of 37 machinery and other components of the Triveni Turbine Generator/T.G. set (15 MW capacity) installed at the plant. The incident was immediately reported to the Respondent, and a preliminary survey was conducted by the surveyor Mr. Sudhir Chawan who subsequently submitted his preliminary report on 01.04.2013. The Respondent appointed Mr. Pradeep Tambe as the final surveyor to conduct a detailed assessment of the loss who submitted his report on 03.09.2013. The Complainant submits that from the very beginning, the surveyor displayed a biased and adamant approach, insisting without any proof that the turbine loss was a machinery breakdown loss which is not attributable to fire. Despite repeated clarifications and submissions of technical reports by the Complainant's consultants, the surveyor refused to accept the fact that the damage to the Triveni TG set was caused by the fire and also the theory of proximate cause of damage in any case being the fire incident which necessitated the impulsive but careful action of the Engineer Mr. Gaikwad in switching off the Turbines for preventing major damage and consequent catastrophic loss after the fire was noticed by him in the cable-trench. In a joint meeting attended by representatives of the Complainant, Respondent, and the surveyor on 24.05.2013 and 27.05.2013, the surveyor even admitted his error in wrongly applying the Reinstatement Value (RIV) Clause, but continued to deny turbine damage as fire-related. The Complainant, sensing the bias of the surveyor, orally requested the Respondent to appoint an independent surveyor, but such request was outrightly denied. Consequently, the Complainant addressed a detailed letter dated 18.06.2013 to the Deputy General Manager of the Respondent, highlighting the unfair approach of the surveyor and requesting corrective action.
2. A joint meeting was held at the Pune Regional Office of the Respondent on 02.07.2013, wherein it was decided that the surveyor would again visit the Complainant's plant at Bhandarkawthe along with the Complainant's consultants. In pursuance of this, the surveyor visited the site on 16.08.2013 and conducted a series of irrelevant tests on the turbine components. Relying upon such tests, he reached the misguided conclusion that the turbine suffered no fire-related damage, and the entire loss to the turbine was due to a mechanical breakdown. He reiterated his earlier stance and vide his letter dated 16.08.2013 rejected the substantial part of the claim relating to Page 2 of 37 turbine damage. The Complainant immediately protested and vide letter dated 22.08.2013 once again requested the Deputy General Manager to consider the doctrine of proximate cause, which clearly require the surveyor to reason that the fire indeed was the principal and operative cause of damage. However, no corrective steps were taken by the Respondent to either replace the biased surveyor or to rectify the faulty methodology adopted. Thereafter, the surveyor submitted his final report dated 30.09.2013, which was exactly in line with his earlier interim report, and recommended settlement only for the limited portion of fire damage to the control room and cables, completely excluding turbine loss. Acting upon the said report, the Respondent, vide letter dated 27.12.2013, accepted the findings of the surveyor and approved the claim for only ?1,41,75,830/- as full and final settlement towards fire loss. The Complainant immediately objected to such arbitrary and unjust settlement, vide letter dated 30.12.2013, followed by reminder dated 13.01.2014, seeking explanation and detailed justification. Instead of addressing the concerns, the Respondent vide letter dated 24.01.2014 reiterated the final claim settlement amount and avoided giving any technical basis or reasoning.
2.1 With regard to quantification and assessment of the damage to the TG set, the Complainant further submits that the reinstatement has been carried out within the stipulated period of one year and the damaged turbine of 15 MW capacity, needed to be replaced with another turbine of the same capacity and make, albeit of a slightly improved design which only was available in the market. However, the surveyor arbitrarily and wrongly deducted a huge amount of ^2,11,06,544/- towards alleged betterment, which was wholly unjustified since the replacement turbine of the same output was in fact lower in cost than the earlier one. The surveyor's assessment was thus legally untenable and technically flawed. Despite escalation of the issue to the Respondent's Head Office through a detailed letter dated 10.02.2014 supported with technical reports and inputs, and further follow-up letters dated 19.03.2014 and 25.03.2014, the Respondent failed to reconsider the matter. 2.2 In these circumstances, the Complainant averred that although it had a valid and adequate fire insurance cover, the Respondent, acting on a flawed, biased, and erroneous survey report, denied the legitimate claim of the Complainant. The wrongful Page 3 of 37 rejection of the major part of the claim has caused the Complainant serious financial losses, mental agony, and business hardship. The conduct of the Respondent in relying upon an incorrect report and refusing to settle the claim as per the actual loss suffered amounts to clear deficiency of service and unfair trade practice under the Consumer Protection Act. Accordingly, the Complainant has filed the present complaint before this Commission, seeking directions against the Respondent to indemnify and pay the actual loss of ?9,26,01,099/- together with interest of 15% p.a., along with compensation for harassment and litigation costs.
3. The Opposite Party, M/s Oriental Insurance Company Limited has filed the written statement on 25.06.2014, challenging the maintainability of the consumer complaint on several grounds. It is averred that the Opposite Party appointed a licensed surveyor, Mr. Pradeep Tambe to carry out a detailed and. independent assessment of the loss in terms of Section 64UM of the Insurance Act. On a detailed examination, the surveyor in his report dated 30.09.2013 (pg. 174) recorded clear findings. The fire had originated in the cable trench below the control panel, causing extensive damage to the control room, cables, panels, and connected electrical accessories. However, the alleged turbine damage, as claimed by the Complainant, was, as per the surveyor, was not caused by fire. The surveyor observed that the turbine damage was consistent with a mechanical/electrical breakdown, possibly due to leakage of hot lubricating oil which caused catastrophic damage to the turbine and, thereafter, fire ensued in the control room as a consequential effect. The surveyor specifically noted that the pattern of damage on turbine components, as observed and evaluated by him, indicated intense internal heating and frictional forces prior to the outbreak of fire, ruling out any direct damage caused by fire. The turbine rotor blades and bearings exhibited signs of mechanical seizure and metallurgical distress typical of breakdown rather than damage caused due to exposure to fire. Hence, the surveyor concluded that two perils operated independently -- first, the machinery breakdown which was the primary cause of the turbine failure, and second, the subsequent fire confined mainly to the control room and cable trench area. As the Standard Fire and Special Perils Policy covers only the damage caused directly by fire and does not cover any losses arising from any other cause like mechanical or electrical breakdown of machinery or any cause other than Page 4 of 37 fire. Only the portion of the damage directly or indirectly attributable to the peril of fire was considered admissible under the policy. Based on the technical analysis, the surveyor assessed the admissible loss attributable only to fire at ,41,75,830/-, excluding the loss due to damage to the turbine which damage was opined to be not due to fire but due to mechanical breakdown. The surveyor's technical analysis was based on a detailed study and the inspections on various dates including on 28.03.2013 and 29.03.2013, examination of the Triveni Engineering (OEM and maintenance contractor) Report dated 20.02.2013 and the site report of 29.02.2013, as well as physical measurements and dimensional verification of the turbine base frame, nozzle chest, rotor, bearings, and casing. During this examination, the surveyor observed that the base frame of the turbine had been gas-cut in the middle by M/s. Triveni thus preventing any further metallurgical or other technical investigation, and that traces of lubricating oil were clearly visible on the internal walls of the sump tank even after ten months of the incident, indicating the presence of a large volume of oil at the time of fire. Even the paint on the non-drive end of the base frame was merely peeled off only in patches, but there was no structural deformation, warping, or cracking, thereby ruling out any serious exposure to extreme heat or any direct flame supporting the conclusion that the catastrophic damage to the turbine could not have been caused by fire. The nozzle chest, SEV body, and turbine rotor exhibited heavy frictional heat marks, twisting, and distortion and breaking down due to high rotational and torsional forces, consistent only with mechanical breakdown. The coupling flange was found twisted due to torsional stress and not due to fire. The surveyor further recorded that there was no visual deformity in the external casing dimensions or outer surfaces of the turbine which could indicate any fire or heat impact, and contrarily, found that the observed damage patterns such as metal-to-metal scoring, bearing seizure, and frictional blackening, were typical results of internal breakdown not relatable to the fire. He also noted that the exact cause and origin of the fire were not conclusively known from the police, fire brigade, or factory inspector's reports. Considering all the technical and physical evidence, the surveyor concluded that two distinct perils had operated. First, a mechanical/electrical breakdown of the turbine and, subsequently a fire, which was confined mainly to the cable trench and control room areas. Since the Standard Fire Page 5 of 37 and Special Perils Policy covers only losses directly caused by the peril of fire and expressly excludes damages arising from mechanical or electrical breakdown, and therefore, the loss pertaining to the turbine was opined to be outside the policy coverage. Accordingly, the surveyor limited the admissible loss to ?1,41,75,830/- strictly for items affected by the fire and after excluding the damage to turbine which damage was attributed to the peril of mechanical break-down not covered in Standard Fire Policy. The Respondent thereafter duly processed and offered this amount as the full and final liability under the policy, in line with the surveyor's technical findings and policy exclusions, which was not accepted by the complainant.
3.2 The Respondent further contended that the Complainant itself failed to discharge its contractual obligations. As per Condition No. 6(b) and 7 of the Policy, the insured is bound to submit proper proof and documents including technical reports as reasonably requisitioned by the Surveyor in support of its claim. In the present case, there was a delay of more than 10 months in submission of the claim form itself and of the requisite other documents, which seriously prejudiced the claim processing. Despite such breach of policy conditions, the Respondent gave repeated opportunities to the Complainant, conducted joint meetings at Pune Regional Office, and also took into consideration the Complainant's own consultants' views. However, at no stage was the Complainant able to prove that the turbine damage was caused by fire. It is also denied that the surveyor was biased or acted unfairly. The surveyor is an independent licensed professional under the Insurance Act and carried out his duties in a scientific and technical manner. His report is comprehensive, based on site inspections, physical tests, and technical evaluation, and cannot be brushed aside merely because it does not support the Complainant's exaggerated claim. The allegation of "biased attitude" is baseless and a desperate attempt by the Complainant to question a statutory report which does not suit its interest.
3.3 As regards the assessment of loss qua the turbine damage, and the Complainant's objection to the deduction of ?2,11,06,544/- towards betterment, the Respondent submits that such deduction was fully justified. The Complainant has admittedly replaced the turbine generator set with a new turbine of improved design and modern technology. The insurance policy is meant to indemnify the insured against Page 6 of 37 actual loss, not to provide better equipment or technological advancement. The concept of betterment is well-recognized in insurance law, and the surveyor's deduction on this account is valid and binding. The allegations that the Opposite Party has committed deficiency in service are strongly denied. The claim has been processed strictly in accordance with the terms and conditions of the policy and on the basis of the surveyor's well-reasoned and independent report. The Complainant's demand for an exorbitant sum of ?9,26,01,099/- is nothing but an attempt to unjustly enrich itself at the cost of the insurer. In fact, the Complainant has already been paid the full and admissible claim amount under the policy, and nothing further is payable. In light of the above facts and submissions, the Opposite Party humbly prays that the present complaint, being false, frivolous, and based on suppression of material facts, deserves to be dismissed with exemplary costs.
4. The complainant, through this rejoinder on 19.11.2014, stated that the complainant, while replying to the Respondent's reply, has specifically denied the allegations in para 1 and 2 of the reply and clarified that it had fully exhausted the grievance redressal mechanism of the Respondent from Divisional to Head Office level but no relief was granted, thereby justifying the filing of the present complaint before this Commission. It is further contended that no material facts were ever concealed, since the incident of fire was immediately reported and a spot surveyor as well as final surveyor were deputed, who were provided with every technical and commercial detail demanded, even though many such demands were excessive. As regards paras 5, 7(i)-(iv), 8, 9, 10 and 11, the complainant submits that the Respondent's reliance on the surveyor's findings is misplaced as the surveyor acted with prejudice, ignored technical reports, and based his conclusions merely on assumptions. The so-called "oil fire"
theory is self-contradictory, since on the one hand the surveyor claimed that no conclusive cause of fire was available, while on the other hand he attributed it to have been caused due to ignition in the an oil-sump fire despite himself admitting that much of the oil in the slump remained intact. The complainant also denies para 12 and 13 of the reply, asserting that there was no breach of policy conditions and that, in fact, the proximate cause of the entire loss was the accidental fire to be indemnified a principle Page 7 of 37 well-recognized under insurance law and also established through the Claim Consultancy Report prepared by Mr. Wasudeo Phatak.
4.1 With respect to paras 14, 15, 16 and 17 of the reply, the complainant submits that the offer made by the Respondent on 27.12.2013 was outrightly rejected by its letter dated 30.12.2013, and that the surveyor and Respondent have distorted even the statement of the incident narrator, Mr. V.M. Gaikwad, since his narration clearly shows that the turbine was tripped only after smoke was noticed from the cable trench, thereby proving the proximate cause to be accidental fire. The complainant further denies the allegation regarding non-submission of documents for 10 months, clarifying that all documents were submitted as and when demanded, but the surveyor insisted on a specific format which led to some delay. In any case, reinstatement under the policy could be and was carried out within 12 months, and therefore this objection is untenable. It is further alleged that the surveyor misinterpreted the Reinstatement Value (RIV) clause in his interim report dated 01.04.2013, which he later corrected only upon the intervention of the complainant's consultant, exposing his prejudiced approach. On merits, the complainant also denies paras 2, 4, 5, 6, 7, 8 and 9 of the reply, reiterating that the Turbo Generator was running smoothly until the fire and that the Respondent blindly accepted the surveyor's flawed opinion while ignoring the cogent technical data and evidence placed on record. The complainant thus submits that the allegations of suppression, fraud, or delay are vague and baseless, and that the Respondent has failed to establish any valid defense. Hence, the complaint deserves to be allowed in its entirety.
5. The Complainant, in support of his case, filed evidence by way of affidavits on 26.05.2015 of Sh. Mohan Sadashiv Pise, Sh. Vitthal Mahadev Gaikwad, and Sh.
Vasudeo Phatak along with documents. On the other hand, the Opposite Party filed its evidence by way of affidavit on 04.08.2015 of Sh. E. Chandershekharan.
6. The surveyor's report dated 30.09.2013 contains the relevant basis and observations and findings made by the surveyor. It relies primarily on the preliminary spot survey conducted, which provided an initial assessment and evaluation of the loss. The relevant portion, which pertain to the controversy of alleged non-fire Page 8 of 37 turbine damage/loss which allegedly is not covered under the subject Standard Fire Policy, has been extracted herein below for reference.:
> 10.00 Cause of Fire:
Insured submitted following documents to support their cention for cause of fire:
i) Police Panchmana.
ii) Fire Brigade Report
iii) Statement of Mr. Gaikwad and
iv) Factory Inspector Visit Report.
!• :
None of above authorities had carried out investigations on caused.originpf fire.^ We understand that insured has not appointed independent Forensic experts to ascertain the cause of loss. Internal & their own fire officer who reached at site of fire in few minutes also did not carry out any investigation on cause & origin of fire.^ | Mr. Gaikwad {apprehension that cause of fire could Je due to Electrical Short circuit I however no back up supporing documents or anyalsis is given to us for his views.
My observations on Reasons of Failure para in Triveni Inspection Report are as under:
Point No. 1:
Turbine is damaged by short circuit/ heavy fire which originated in cables due to short circuit.
i The observation is based on information provided without analysis of what had happened between 1000 to 1030 hrs. Therefore Triveni was not given Siemens record for analysis.
Thus Trivent's reasoning is based on partial information.Page 9 of 37
Survey Report No. 01/3608/12-13. Date: 30.09 Origin & place of fire & cause of fire as informed to Triveni was vague & w substantiating evidence.
Point No. 2:
The sequence of failure given by M/s. Triveni was without any ref. to time & log evidence.
Turbine was prepared for rolling & was in barring gear mode operation.
Above was wrongly informed to M/s. Triveni. As per Mr. Gaikwad & Power export log instant 10.15.00 hrs. Triveni turbine was on around 13.4 MW load and it tripped at a 10.17.00 hrs. without any warning in control room.
Mr. Gaikwad saw smoke at 1030 hrs. A fire call was recorded in the register of in hou brigade at 1030 hrs. Without knowing all above, analysis & reasoning of failure as given by Triveni in my 0 is not correct & therefore not acceptable to me.
. My analysis of the above documents, power house data, and physical inspection of af site as well as items are under:-
The loss most likely has resulted due to two reasons:
--'■■"I' uimo"---II. .■■■ ... H-rt-vwim.
»f i) Brekadown of turbine Machinery and
/ ii) Spreadoffire.
In support of above my analysts based on data given in Insured's letter dated 18.0> which was written to Insurance Company is as under:
I Siemens TG Set ;___________________ Time Date MW Plant Export Set Siemens Load MW/HR Triveni 10.08.00 21.047012 15.43 4.5 9.216 0 lOXWOO 13.83 45 9.216 1.714 10.10.00 10.16 45 9.216 3.314 10.11.00 8.56 45 9.216 4914 *I j® 10.12.00 t 8.54 45 9.216 4.934 10.14.00 8.6 45 9.216 4.874 10.13.00 8-57 45 9.216 4.904 10.15.00 4.11 45 9.216 9.364 10.16.00 4.11 4.5 9.216 9.364 10.17.00 0 4.5 9.216 13.474 Page 10 of 37 I Survey Report No. QI/3608/12-13. Date: 30.09.2013.
Co-relation of above is based on data of export, Siemens TG set & approximate plant load as given by the insured in their letter dated 18.06.2013, which was written to The Oriental insurance Company.
During this period Power Export maintained at 9.216 MWH which means at 10.17.00 hrs. position for Triveni Set was, plant load 4.5 MW & Export 9.216 MWH, then load on Triveni should be around 13.474 MW and Siemens set stopped.
Then for period 10.15.00 to 10.30.00.
Average Export = 0.22 x 2400 x 4 = 2.112 MWH.
Note : Load on Siemens TG Set was being lowered to zero, Triveni was increased to 13.474 & Sugar Plant was operational.
If same scenario as 10.17.00 hr. continued then for next 15 minutes to maintain Export at 9.216 MWH Triveni load should be around 13.474 MW. However export had suddenly dropped to 2.1: 2 MWH.
This indicates load of Triveni had suddenly dropped from 13 MW to zero (Tripped at around 10.17.00); because generation at 13 to 13.5 MW load to be 2.112 MWH Hours it would take around 13.5 MW x 15 min. = 9.216 MWH.
13.5 MW x Y = 2.122 MWH.
Then Y = 2.112 * 13.5 = 0.156 minutes.
Therefore at (10.17 + 0.156) = 10.17.10 sec.
TG had tripped due to some problem.
i However statement of Mr. Gaikwad who was present in Control Room of Triveni stated that he had to trip the turbirie by emergency stop button at around 1030 hrs; after he saw smoke in cable trench'in Control Room and also heard big sound from turbine floor.( Refer to Jabab ofMr.Gaikwadi It is noteworthy that Fire call time in register of in house fire brigade was also recorded as 1030 hours.
It is also noteworthy that no one from Siemens TG Control Room saw any smoke on TG Floor of Triveniibefore 1030 hrs. All this leads to a conclusion that at 10.17.00 hrs. there was some major breakdown in Triveni Set anti it tripped, because up to 1030 all electrical was healthy as per Mr. Gaikwad's statement.
I It is possible tttat turbine broke down due to accidental release of hot lubricating oil onto hot parts of nearby steam pipe which led to fire.
Page 11 of 37Survey Report No, 01/3608/12-13. Date: 30.09.2013.
The accidental release of lubricating oil also, could cause shortage of oil supply to turbine bearings & lead to catastrophic breakage. The hot oil caught flames.& then cable tray cables caught fire is also possible.
The nature of fire from video shoot is lubricating oil fire.
Thus Insured's statement that upto 10.17.00 hrs. Triveni Turbine was healthy is correct; but after that it was not healthy looking at above scenario. At 10,17.30 Turbine machinery broke down and fire was first noticed by Mr. Gaikwad at 1030 and was reported to in house fire station.
Therefore theory put forward by insureds consultants & the insured about proximate cause , to cover /claim non-fire damages and put everthing as post fire damages, in my I opinion is not correct.
Loss due to Break down of Machinery:
The turbine,S E Casing Top and bottom and SEV Body Two numbers. Base frame, T G Set, Nozzle Chest, lubricating Oil etc were not damage directly due to fire but could have been damage due to breakdown which could have been resulted due various reasons, some of which are narrated as under:-
1) Over speeding caused due to failure of safety devices.
2) Externally high alternating forces caused by water induction type damage (knowing that turbine was being loaded).
3) Human error in synchronizing/ loading/unloading of the turbine,
4) Due to external grid problems & non function of safety devices.
5) Due to problems in extraction/ condensing lines.
6) Due to Lubricating oil shortages to bearing due to fitting failure.
7) Defective main steam control valve ( internal inspection of this valve showed that this valve was in poor mechanical condition.) Thus the above iitems.as claimed by the insured, in our opinion, due to Breakdown and is not covered under the Fire Policy.
loss Due to Spread of Fire:
During our survey we noted down the area where the fire spread was taken place and also noted down in consultation with the Insured the damages to various items which has been listed earlier in the report.
We also appraised insured that it is the responsibility of the Insured to prove loss/ damage directly by fire to insured items, however insured did not submit:
Az ci V1' j) Their detailed analysis report for cause of fire or i*i ii) Departmental /internal Enquiry report
iii) Triveni Engg Ltd. Investigation Report is silent on cause of fire. eV Page 12 of 37 > Survey Report No. 01/3608/124 3. Date: 30.09.2013.
We in view of the above without prejudice and rights of the insurer, tried to ascertain the cause of fire and our analysis is as under:-
On the analysis of various factors presented to and investigated following conclusions can be arrived:
There are no conclusive evidences available about the cause of fire. However, through process of elimination, we opine that due to escape of high pressure lubricating oil through failed/ cracked fitting and then oil got sprayed on to hot parts of turbine or steam pipe resulting intofjcgjcould have been the most probable cause of fire and cannot be ruled out.
A The video taken'by the Insured at the time of fire clearly showed that it certainly was an oil fire.
The Video CD is enclosed with the report.
(Loss due to spread of fire) for items where the loss has been assessed, in our opinion, is covered under the purview of the subject policy. II 10.01 Operations of Perils :
From the scenario of site of accident in particular high speed coupling ( see photo no. 6 of Triveni inspection report) and bolts of coupling, nature of damage is openingof flange, twisting, it is !dear that two perils had operated. One is breakdown & other is fire. Sequence does not matter. Because Standard Fire Policy will consider only fire damages and damages duejto non working of safety devices causing mechanical nature.of damages will not be considered under Fire Policy; because these have occurred due to unnamed peril in the fire insurance policy. * 11.00 Liability:
The fire was sudden & accidental because factory inspector had not found it otherwise.
Taking into account breach of conditions as explained in base frame & nozzle chest it is for the Insurance Company to decide about the liability.
7. We have heard learned counsels for the parties and minutely perused the records. Mr. Prashant Kanjale has taken us through the complaint and the Statement of Mr. Gaikwad submitted to the surveyor. He has also strongly relied on the report of the OEM M/s Triveni and the report prepared by Mr. Wasudeo Phatak to support the Page 13 of 37 contention that the Surveyor's conclusion that the damage caused to the turbine is due to an independent peril of Machinery Break-down is not at all justified or legally viable, and as such, the peril of fire, which spread to and reached the turbine, and which necessitated the pushing of the tripping push-button is the root-cause and "proximate cause" of damage to the turbine. Pointing to Annexures P-5 to P-8, being the Surveyor's letter dated 01.04.2013 and insured's communication to the insurer dated 10.06.2013, it is contended that the surveyor was biased, technically incompetent and required the insured to carry out multiple irrelevant tests with pre-determined mind to classify the damage to the turbine as not being due to peril of fire. Despite a specific request letter dated 05.02.2013, the insurer did not change such biased and incompetent surveyor.
Putting heavy reliance thereon, our attention has also been drawn to the report prepared by Mr. Phatak, which, as per the Ld. Counsel, has been completely overlooked in not accepting the well-recognized proximate cause theory. Mr. Seth for the insurer, on the other hand, read extensively from the reply filed and from the Survey report and contended firstly that the complainant itself delayed the submission of the basic claim documents for 10 months during which period the reinstatement was carried out. The surveyor and the insurer have provided multiple and enough opportunities to the insured, including two joint meetings, to rebut the prima facie conclusions of the surveyor with regard to operation of peril of machinery break-down by cogent evidence and requisite technical reports to establish the root-cause and proximate cause contention as raised. But rather than carrying out such tests and substantiating its claim, the complainant causally raised uncalled for allegations against the surveyor and declined to carry out the tests as suggested by the surveyor, as agreed in the joint meeting and as required under the policy condition 6(b) reproduced in insurer's letter dated 17.06.2013. The detailed and well-reasoned survey report of the Surveyor statutorily appointed under section 64LIM of the Insurance Act cannot be simply brushed aside on the basis of bald allegations and conjectural course of events and cause of fire/loss suggested by the insured. Both the semi-technical reports submitted by the insured have been duly refuted in the survey report maintaining that the damage due to mechanical failure is not covered under the policy. There is no deficiency in service on the part of the insurer and the complaint deserves dismissal.
Page 14 of 378. We, to begin with, may observe that the facts of incidence of the fire and consequent damage including that to the Triveni Turbine Generator (TTG), the fact that if the damage to the turbine can be held to be due to and caused by the fire, and not independently due to mechanical break-down, then the loss would be indemnifiable, and that the sum assured is sufficient in this behalf, are not under dispute. In a nutshell, the surveyor and the insurer have insisted that it is evidenced by the physical and metallurgical characteristics of the type of damage and break-downs and breakages suffered by the TTG, that the mechanical and electrical break-down and consequent loss to the TTG was caused first which itself most likely initiated the fire through sprinkling of oil on hot casing and hoses and which travelled to the cable-trench. The root cause of the fire itself is the mechanical and electric break-down in the turbine. Therefore, TTG's "mechanical/breakage " loss is caused by "machinery breakdown" and not at all caused by the insured peril of fire and hence not covered. On the other hand, it appears, that the complainant first contended before the surveyor that the whole damage to the turbine was caused directly by the fire which emanated in the cable-trench in a floor below the control panel room and the TTG, and, quickly spread and engulfed and damaged the turbine. However, after sizable and detailed objections in the "interim report", i.e. the letter dated 01.04.2013 addressed to the complainant were raised by the surveyor to any such possibility based on his own technical analysis, the complainant submitted its consultant's report wherein "theory of proximate cause"
was relied upon. The contention or stand of the insured was thus that the "mechanical or electric break-down", even if not directly caused by the fire, it was still caused proximately by the fire in as much as the fire in the cable-trench propagated through the cables running and attached to the turbine and in the oil-carrying hoses, which caused sudden seizure of the turbine either directly or through conscious tripping by Mr. Gaikwad, and hence only the fire, and nothing else, is the proximate and root-cause of damage to the TTG and hence indemnifiable. The precautionary tripping of the turbine by Mr. Gaikwad is also stated to be caused directly due to fire. Para 4 to 6 of the complaint categorically mentions that the TTG was shut down on 19.04.2012 for boiler repair and on 21.04.2012, after the repair of the boiler, the TTG was under the process of re-start and synchronization which was smooth. The TTG load was gradually getting Page 15 of 37 increased and had attained loading of 4.5 MW and the turbine was rotating at 6827 rpm at 1030 am when fire and smoke was noticed originating in the cable trench by Mr. Gaikwad, after which, he had to flee and trip both the TTG and Siemens Turbines by pushing the emergency push-button as a safety precaution. "Due to this forced shut down, which was a direct result of the accidental fire, there may have developed situation where damage to the mechanical parts of the turbine have occurred. The exact cause of the fire was not determined; however, since the fire was first noticed in the cable tray area below the Triveni TG set, the most likely cause of fire was an electric short circuit". The damaged TTG was sent, as averred in the complaint, to the OEM Triveni Engineers for inspection and repairs whose report was submitted to the surveyor. As against this, the insurer has submitted in para 8 to 12 of the reply that in fact two perils operated. One is the peril of Machinery Break-down as evident by the clear absence of any heat/fire impacted damage to most of the parts of the turbine on the one hand and the breaking of the components and frictional and torsional damage as witnessed, on the other hand. This damage, not being due to fire and having been caused by an independent peril of machinery break-down, is not covered under the policy. The "proximate cause" theory as contended by the insured does not appear to be disputed by the surveyor or the insurer, but it is the contention that such chain of events is not established by the insured through any forensic or technical report or any other cogent evidence. The insured has not obtained any technically sound "root cause analysis" report so as to establish such chain of events leading to the conclusion that apparent mechanical, breaking, torsional or frictional damage to the turbine-parts was initiated and caused by the fire which was noticed by Mr. Gaikwad to have initiated in the the cable trench below the control room (Triveni Report has been dealt with in the Survey Report and in the preceding correspondence). As per the surveyor, the mechanical break-down, which happened first dr parallelly, itself initiated the fire which was in the nature of "lubricating oil fire" having been caused by the mechanical break-down, which then operated independently and caused damaged. Thus, the second and subsequent peril is the fire itself which caused extensive damage to the cable-trench, control room, building and also to some parts/spare-parts of the turbine which damage due to fire is only covered under the policy and was duly assessed by Page 16 of 37 the surveyor which damage, including that to the fire-affected turbine parts, amounting Rs. 1,41,75,830/- was offered as settlement on 24.01.2014 but was declined. Thus there is no deficiency in service at all.
9. We may quickly run through the chronological events as they unfolded to understand and comprehend the rival stands. The surveyor made site visits 9 times as recorded in para 5 of the report. The surveyor has described the physical characteristics of the damage observed by him in para 8 of his report. It is reported that the damage to the cable-trench and the control room was severe due to fire, however, the nature of the TG set damage mentions that most of the parts were "broken", "bent", "rubbed out" or "twisted". As recorded, the surveyor had instructed the insured to obtain a full-scale technical report on "mechanical damage". It does not seem to be disputed by the insured that the fire had the maximum impact in the cable-trench and in the control room and decreasing impact in areas away from control room, including that on the turbine. The visit to M/s Triveni Engineers, who are the OEM and where the damaged turbine was sent for inspection, report and repairs, was made by the surveyor on 07.06.2012, on which date, he asked the insured to carry out chemical analysis test of some powdery unusual material deposited on parts of HP rotor for which three samples were collected jointly, which testing was not done and no report thereon was submitted by the insured. However, the surveyor himself carried out such test, and the chemical analysis report provided clue that "some water-induction type catastrophic damage to running turbine leading to fire" had occurred. In these circumstances, the surveyor, in page 8 of his report has observed in bold letters as under:
I noted that there was no real will to find the actual cause of fire or turbine breakdown by the Insured or by Triveni.
The report of M/s Triveni was submitted to me, after submission of claim papers after lot of persuasion with the Insured.
The report was dated 20.02.2013 (prepared after buying new turbine) & contained twenty pages with photographs.
The surveyor, after receipt of the "Triveni Inspection Report" on 07.03.2013, wrote a detailed letter dated 01.04.2013 which he has reproduced on page 8 onwards in Page 17 of 37 the report. The "Triveni Report", essentially, describes the nature of the damage to each of the components and then concludes as under:
■rar'*' vmvor INSPECTION REPORT Customer: Lokmangal Sugar Ethanol & Cogeneration Industries Lid. Frame: TST-2180/63 RRNo: 1650 j Reason for Failure:
• Based on the available information from site and also looking at the sequence of the incident, it seems to be the turbine is damaged due to short circuit/hcavy fire which originated in cables due to short circuit.
• The sequence of failure is as follows.
• The Turbine was prepared for rolling and was in barring gear mode operation.
• All of a sudden there was heavy fire which was ignited due to short circuit in one of the
cables running below the Turbine deck.
• This fire got propagated into the incoming and outgoing oil supply hoses causing total
burnout of the hoses.
• This fire also propagated through the incoming and outgoing cables of the panels causing
the total burnout of the panels.
• Since Oii 'pump was running the flame & heat got inside the turbine pedestal & casing and
damaged^all the accessories and internals of the turbine including bearings.
• The resultant fire affected the turbine body .
• There is evidence of fire externally on the casing / body like soot, burn marks etc.
i
10. The Surveyor thereafter made site visit in presence of all stake-holders, interacted with Triveni Engineers and then on technical and on scientific reasoning and after due verification pointed out a number of errors in his reasoned disagreements with the observations in the Triveni Report and concluded that most of the damage to the turbine parts is not caused by fire and hence, and which otherwise is apparent, is the outcome of mechanical break-down. Main observations communicated by the surveyor are as under:
(i) The observation of Triveni that the strength bearing sections of the base plate had gone beyond the plastic stage" (which would, if true, would establish the heavy fire impact at turbine location) were mere visual observation and had no merits. There was no dimensional expansion or deformity, the chemical testing of the Oil in the sump report established that the oil is not damaged by fire, for the mild steel to pass the plastic stage, Page 18 of 37 the temperature has to be more than 1200 degree C for more than half an hour to cause plastic stage, which, if indeed present, would have caused explosion in oil sump because flash point of oil is only 250 degree C. Further, because the frame has already been "gas cut" (despite instructions to preserve the damaged components as it is) by Triveni, no further metallurgical testing is possible. Hence the "plastic stage" of the base frame, as claimed is imaginary.
(ii) Nozzle Chest has also been "gas cut". Throttle valve assemblies were not damaged due to fire. Normal running temperature of the same is 500 degree. No possibility that the Nozzle-chest, which was 2 meters above the base frame, could have deformed when the base-frame itself is not deformed or dimensionally expanded.
(iii) Fire did not reach inside the turbine casing, and the rotor, casing, diaphragm and other internal parts were thus damaged merely by catastrophic mechanical break-down as seen from physical characteristics of nature of damage.
(iv) No dimensional deformity in SEV body, which need also to be normally working at high temperature of 500-550 Celsius, was noticed. Valve bodies damage needed to be proved by NOT and hydro-tests, but no such tests were done by the insured.
(v) Items on page 1 to 6 of Triveni Report are either not damaged or the damage is due to frictional heat, and not by fire. HP casing is well insulated and heat/fire had to cross through the same to reach there. No damage to the insulation itself was observed thus positively ruling out any possibility of any damage due to any fire.
(vi) With regard to some of the turbine items, even the external paint was intact and neither peeled nor cracked nor bubbled, implying no damage due to fire.
(vii) Similar "not caused by fire" observations on further 14 damaged items as recorded on page 12 of the report.
11. It was the clear opinion of the surveyor as early as on 01.04.2013 that two distinct perils have operated independently and more or less at the same time, and that the "sequence does not matter".
Page 19 of 37
The major concern: /
CO use ; i
From submitted papers of police, fire brigade, statement of Mr, 6aUwd & factory' inspector it is dear that:
(ij hact cause of fire is not known.
fiij Even approximate origin of fire is also not known.
Thus there etdst oihtr po^i-ibiliti&s %dikh could -result, in breakdown & fire due to oil spray ori hdtj^pes due to~
1) Over speeding caused due to failure of safety devices-..
2) Eternally -high ailternatlng forces caused by water induction type damage (bowing that turbine was being baded),
3) Humaiterrorin synchronizing causing motorln&ohurbbie& breaWown,
4) Ove to external grid problems Si non function bf saifety devices.
Perils t from the scenario of site, of accident It is clear that: two perils had operated. One is breakdown & other Is fire. Setuenco does not matter. Because Standard Fire Policy will consider only lire* damages- and damages due to non worHng of safety deuces causing mcchanial nature of damages will noi be awWetf under Fire Policy; because ■hesc h.rre occurred due to tinncined peril 'Thus h is tire responsibllii^ ut the insured to piwe loss/damage dirtttfy'by fire. FUe Pell?/ e&lirtfas also all types of Indirect material damages Lisbil Uy:
Tafeg Into account breach of conditions as oxplaioed In base frame & noicie chest It is for the Insurance Company to deddle about the liability.
fi) Visible Fire Damaged Items.
|iij Machinery iBreakdown Items.
(iii| Alteration, Renovation, Modern^atiogi, Improvement ^dau^xi. jj- dt Page 20 of 37 The TG plant was modernised & equipped by M/s Honeywell Automation which is supervising, control & governing The automation before fire was of M/s Yakogawa was only supervisory.
Due to adoption of new design of steam turbine there were considerable changes in pipe lines of steam & condensate & extraction All the operations of valves in steam, condensate, exhaust, ejector, extraction were now changed motor operated valves & old valves were replaced These were not proved as fire damages Also loss due to heat of fire to breakdown items was not proved by the Insured Enclosed with this letter is a Tentative Assessment on Depreciation Basis, because reinstatement was completed after shr months from date of loss and the insurer Divisional Cffitc m Solapur had confi'rned to me that ro extension was granted to ti e i isurt J 'o' completion beyond si* months ( PI. note the details marked in blue color.) Date of Loss . 21.04.2012 Date of Commission of TG after repair & replacement :
21.11.2012 Thus the period is around seven months frem the date of fire On receipt < f remaining documents as per my email or 31 03 2013 I will be submitting my detail Final Report.
issued without prejudge
12. The complainant submitted report prepared by Mr. Wasudeo Phatak after he made site-visit on 03.05.2013. It was stated that the boiler was taken down and shut due to a tube failure, and consequently, the TG set was also shut-down, which, after repairs of the boiler, was being re-fired and synchronized with the grid from early morning of 21.04.2012. However, during such synchronization when load on TGT was around 4.5 MW at around 10.30am, Mr. Gaikwad from monitoring room noticed smoke from the cable-trench below the control room which soon spread and raged for about one hour compelling Mr. Gaikwad to flee the spot and trip both the Triveni and the Siemens TG sets. The conclusions by Mr. Phatak and the MoM of the meeting which followed are reproduced as under:
Page 21 of 373. Conclusion The TG set Is In operation for the past four years with no loss history as Is being maintained under an AMC with the OEM with trained & most experienced persons operating It from the factory side right from the commissioning time. Analyzing the tlrcumstances which took place on the morning of 21rt April 2012 and after viewing the video film of the major fire that engulfed the TG floor mainly on the turbine side as well as Inspecting the site and damaged material lying at .the site, It appears that the proximate cause of the loss Is accidental, .actual, visible & fortuitous fire & Its direct consequences resulting Into severe damages to the control room, control panels, turbine set, AC units and such ■ other items which got damaged during the fire and fire fighting operations. Any.other circumstance .
as Indicated by the Surveyor in his Interim report/letter, & If It Is at all possible to be in the realm of. ■ reality, Is also a dlrect result ofthlsacddental fire which Is the root cause (proximate cause for the loss to happen) of the overall loss that has taken place. A small write up explaining the principie & concept of*Proxlmate Cause* Is explained In the separately attached document as It Isof vital Importance to view this In perspective to analyze the admissibility and extent of loss In the present ^case.
As per our analysis and as stated earner the loss Is attributed to an unfortunate event of fire which ' was sudden, visible, accidental & fortuitous arid as such all the consequence arising out-of this proxImatecausegetscoveredlnthestandardfire&allledperllsponcylssuedbyM/sOriental Solapur and stands covered within the four comers of the policy document Issued.
13. As can be seen from the last four lines of para 1 and para 2 alongwith the "note on proximate cause" enclosed with the report, the expert took a stand that though the damage to the turbine is caused directly by the fire which accidentally took place in the cable-trench, even if it is assumed that the fire did not directly damage the turbine, the fire initiated in the cable-trench is a still a direct, necessary and proximate cause of damage to the turbine and hence the risk is covered under the policy as loss caused directly by fire. The report of Mr. Phatak also contained a note which used the domino effect example to support the fact that but for the fire, even the mechanical damage to the turbine would not have happened. Thereafter a joint meeting took place after which the following communication was addressed by the Surveyor on 27.05.2013:
Page 22 of 37RcLNe. Of/3GQ8/12->3.
M/«. Lckmangal Sqgar, EthcmoP & ' Date ; 27.O5.2O13.
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$2 Co^Generatibitt industries Pvt. Ltd, Bhartdarkawthe Unfit Office at: (.©Jcmarigal House.
BSSS-A/il, Murarji Pejh, Near old Pvne Wata Sofapur- 413001, Kind Atcft > Mr, Mahesh Deshmuiclk, Mr. Mchan Plsc„ Mr. Ravikjnt 5»irtj|r Mr. Vivek Pawar.
S^.e C0-<Sen Pf5nt at ifhh.
Date of loss; Zljn^ou.
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Mr. iMahesb Dcdiimukh.
Mr. Mohan Pise.
Mr, Ocepate, M/i. Trivenj.
The ©rionlaf Insurance Co. Ltd ■
Mr. m Dhan ParanJape,
Mr, Murthy.
Mr. TopranL
3} Surveyor: Mr. Praceep s. Tambe.
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Page 23 of 37
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14. While Mr. Phatak's report did not specify or stated any particular link or basis of mechanical turbine damage with the fire, the above communication indicates that the Page 24 of 37 Triveni Engineer Mr. Pradeep explained or indicated a possibility that the LP/Exhaust casing is not provided with any insulation and presumably therefore the fire might have affected the bottom of the casing causing subsequent damage to the main components of the turbine like rotor, diaphragm and bearings causing catastrophic break-down therein, perhaps setting in the mechanical break-down. Mr. Tambe in no uncertain terms insisted on technical reports and technical evidence for establishing this hypothesis and required specific technical tests and reports as specified. This was responded to by the insured not to the Surveyor but to the insurer by writing a letter after which the Complainant responded by letter dated 10.06.2013 (page no.54):
3. Whatever tests he has now proposed to carry out are completely irrelevant as we have never said that the fire has distorted the turbine casing/body to the extent of getting the mechanical properties of the casing/body to undergo structural/granular change. Our simple submission is that there was a actual visible accidental fire of devastating nature (as recorded in the video film already available with you) which lasted for about two hours and was concentrated in and around the turbine thereby damaging the turbine from all sides with clear marks of fire on the turbine body/casing. This extra ordinary circumstance of accidental fire, which forced the shutdown of the turbine may have resulted into any breakdown type of scenario inside the turbine as it takes about 15 minutes roughly to stop the turbine from Its peak RPM. This, if it has happened, is clearly due to the accidental fire which prompted the shut down under abnormal circumstances. The tests suggested by Mr. Tambe are completely irrelevant in the present context as we have never said that the fire might.have resulted into any mechanical or granular changes in the Turbine casing/body which he is intending to establish, just to prove something else which appears to be his prime motive from the start. In fact during our meeting in your office, even at that moment Mr. Tambe did not know what tests are to be conducted. This again shows his negative bias in dealing with this loss.
4. Moreover the modalities associated with the tests as suggested by him (like video shooting while taking samples etc) clearly shows that he regards us with such suspicion as if we have been manipulating this accidental fire to get the claim. As already stated in the meeting on 24th we in fact have lost more than Seven Crores by way of losing the power export for the time we could not commission the TG set. It is also pertinent to note that we have been operating the mill for the past twelve years with hardly any loss of such magnitude and this TG set for the past four years without any loss. As such we feel insulted by the indirect aspersions being cast by Mr. Tambe by suggesting the modalities as if we are manipulating something. This again proves his complete bias in assessing our Fire Claim in its entirety.
15. The same was also duly responded by the insurer. The Complainant wrote also a letter dated 18.06.2013 wherein after referring to a note from the OEM M/s Triveni Engineers, the complainant urged the insurer that the TTG was smoothly running at and till the time of fire which can be seen from the power-export figures which remained constant at 9.216MW despite the fact that the Siemens Turbine load was being gradually reduced and Triveni Load was being slowly increased between 10 to 10.15 Page 25 of 37 AM, and therefore, the damage to the TTG is nothing but the direct outcome of the fire, in as much as but for the fire, the turbine was running and would have run smoothly negating any autonomous and independent mechanical breakdown till the time the fire occurred in the cable-trench, which also subsequently spread to, impacted and engulfed the turbine. Fire is the root cause of mechanical break-down damage or non-fire damage to the turbine.
We would further like to state ^at the> powertout^^ st3rting & synchronization process same 19.216MWH) & siemens loan has I> en l«e duringthis per1od. r means set is available and is beine attac ed) & r -an s & mairt31ned export that we were lowering siemens load & were graou, fig. constant to 9.216 MW .
This dearly proves that the.Triveni s'oa^^0^h0pe°tiZ^pX »«' P™6 ,hat XX^X^otn any bteakdown tiii the Fire even, occurred.
16. Thereafter, a further joint meeting was called for on 02.07.2013 after which the Surveyor again sent a communication dated 16.08.2013 and refuted as unlikely and as unsubstantiated the stand of the insured that the mechanical break-down in and of the turbine is caused either by fire or as a direct and inevitable consequence only of fire. The said communication is reproduced in the survey report on page 12 onwards of his report. In substance, it is the technical conclusion therein that the LP casing is not at all impacted by fire. While external appearance shows no impact of fire, there is also no dimensional expansion, and in any case, the LP casing has not been subjected to the temperature of more than 75 degrees so as to cause any expansion which could have led to mechanical failure. There is no substance in the theory of "temporary distortion or expansion". Similarly, the LP valves, which were subjected to pressure tests, had not Page 26 of 37 even the soot depositions, and were physically intact but all the valves were found leaking through valve-seats which was "certainly not due to fire". After noting that the high-speed coupling was not presented for examination and that the same was "lost" by M/s. Triveni, it is concluded even during the visit on 29.07.2013, "nothing was proved"
so as to necessitate the earlier conclusion that the mechanical damage to the turbine is not caused or initiated by the fire.
17. Mr. P.K. Seth on behalf of the insurer has contended that after the receipt of the intimation of fire, a duly licensed surveyor Mr. Sudhir Chauhan was deputed who in his report has observed that though the turbine asbestos on steam pipe was burnt, there was no external fire loss to the turbine noticed due to fire/hit and that detailed inspection and verification would be required. The fire surveyor Mr. Tambe was deputed who has submitted his survey report dated 30.09.2013 and thereafter the insurance company has already offered an amount of Rs. 1,41,75,830/- on 27.12.2013 along with a discharge voucher which was not acceptable to the complainant and therefore, the insured communicated a detailed letter dated 13.01.2014 after obtaining the survey report and the annexures thereto (page 134). The same was duly responded to vide letter dated 24.01.2014, which essentially, based on the observations and the conclusion of the surveyor Shri Tambe in the survey report, explains each point and ground on which the claim of the insured with regard to the loss caused to the turbine was not admissible under the terms and conditions of the policy. Mr. Seth has read the said letters on page no. 133 to 139 of the complaint file. More particularly, it has been contended that the insurer has agreed with the conclusion in the survey report that two distinct perils have operated. The risk covered under the Standard Fire and Special Peril (SFSP) policy is limited to the loss caused by the insured perils of fire and seven other perils specified under the policy. However, this policy does not cover the risk of mechanical breakdown in the machinery for which as a matter of fact a separate and distinct "machinery breakdown policy" is otherwise available which was not obtained by the insured. The indemnification for the damage caused by the fire, including that to the turbine components damaged by fire, has already been offered for settlement. However, the loss to the turbine which was not evidenced or established to have been caused by fire but, on preponderance of probability, and on physical evidence of damage, was Page 27 of 37 caused by independent peril of mechanical or machinery breakdown, not being covered under the SFSP policy and therefore was clearly beyond the coverage of the SFSP policy and hence was declined. As indicated in the letter of 24.01.2014, the insured has not established the cause of fire which though is stated to be electrical short circuit in the cable-trench, which averment about the cause of fire has remained wholly unsubstantiated. On the contrary, as observed by the surveyor, the CD of fire indicates the nature of fire to be one due to lubricating oil rather than due to any electrical short circuit. The cause of fire through that in the lubricating oil is most likely, as demonstrated by the surveyor, to be on account of sudden mechanical breakdown in the turbine. The very nature of damage in most of the part of the turbine is evident even to a layman to be not on account of fire but on account of friction, breakage, bending, surface to surface grinding and such physical reasons and not on account of damage caused by the fire. The complainant in the complaint has found fault with the observation in the survey report (and also used by the insurer in the written version) and stated that the report is based on assumption and presumptions and the probabilistic findings as is evident from the use of the words like "most likely", "possibly", "in my opinion", "could have been", etc. It is therefore the submission that equally there is also a possibility of fire by short-circuit which has subsequently damaged also the turbine. Therefore, the surveyor was unjustified in opining about the damage to the turbine to be caused by mechanical breakdown and not by fire. The complainant also relied on the projected readings of export of power on a minute to minute basis and after relying on the time of the noticing of the fire by Mr. Gaikwad, has contended that there is sudden stoppage or outage of export which is linked to a time which is after the noticing of fire by Mr. Gaikwad and therefore also it is not possible that the independent peril of mechanical breakdown has operated. As such, as per the complainant, there is only one peril which has operated and that is the peril of fire which is covered under the policy. The probable sequence is stated by the complainant to be firstly the lubricating oil escaped through the cracked fitting which led to fire, which ultimately consumed the lubricating oil leading to the oil starvation, which in turn lead to mechanical breakdown. Safety devices could also have got damaged due to fire leading to further mechanical damages. This also Page 28 of 37 being a plausible sequence, the claim could not have been rejected on technical grounds after relying on an erroneous and bias survey report.
18. The Triveni report and the nature of damage described against each of the component of the turbine sent for repairs as also the observations of the preliminary surveyor and the final surveyor, it is clear, in our opinion, that the damage to the larger portion of the turbine is in the nature of non-fire damage and is in fact a damage which is indicative of the damage due to friction, bending, twisting, surface to surface rubbing of the components. This, as the communications between the parties would indicate, was also accepted by the insured and thereafter the proximate cause theory and report of Mr. Phatak was relied upon. The stand that such mechanical damage is on account of operation of an independent peril of mechanic or machinery breakdown, was communicated at the earliest possible moment by the surveyor. Thereafter also, from time to time, the communications of the insured have been responded to, in detail, by the surveyor (and insurer) wherein the objections to or the unacceptability of the contentions in the insured's communication have been categorically pointed out on sound technical basis and two joint meetings were also held. As recorded by surveyor, in his communication, extracted on page 12, 13 and 14 of the report wherein, in conclusion, the surveyor has mentioned that "nothing is proved". Para 10 of the survey report has logically brought out that (a) why Triveni's report, which is based on being unaware about all the relevant information, and, is based on analysis and reasoning without such information, is not correct and is not acceptable, (b) the loss "most likely"
has occurred due to the twin reasons of (i) breakdown of turbine machinery and (ii) spread of fire, (c) the TG has tripped, "for some reason" at 10.17 am while the fire was noted by Mr. Gaikwad and also by the internal fire department at 10.30 am thus implying that the breakdown has preceded the fire, (d) the video recording shows the nature of fire to be of lubricating oil type, and hence, the proximate cause theory has no application, (e) the specific breakdown/damages to the machinery as listed on page 17 of the report were not caused by fire but could have been damaged due to breakdown which "could have resulted due to various reasons" as narrated, (f) "nothing is proved", i.e. the burden as required is not discharged by the insured.Page 29 of 37
18.1 It is well-settled that the onus of establishing the chain of events as alleged by the complainant, and, establishing the fact that the fire has triggered the mechanical damage to the turbine is squarely on the complainant. The burden to establish the cause and such chain of events, particularly when the damage itself is evidently non-fire, and thus, in the nature of breakdown, and when the surveyor has repeatedly communicated that in his opinion the burden remains undischarged, is more specific, and discharge thereof is sine qua non so as to make the insured eligible for mechanical breakdown damage indemnification, unless, of course, the insured establishes before us that the burden stood validly discharged or that the information called for or the insistence of the surveyor, is arbitrary or uncalled for. Having perused the material on record and the detailed survey report and the detailed communication of the insurer dated 24.01.2014, we are inclined to agree with the surveyor and the insurer that the requisite burden has not been discharged by the complainant. As a matter of fact, it is the primary and initial burden of the insured, in the circumstances of the case, to have gone into and have obtained a categorical root-cause analysis report to technically identify both the cause of fire and the cause of non-fire damage to the turbine components i.e. the cause of turbine damage, and specific chain of events leading to the turbine mechanical damage. The turbine was in the stage of being synchronized and mechanical hiccups or issues are expectable. In that scenario, we do not see any reason, at least internally, for the insured to have concluded that complete damage to the turbine is merely on account of fire, more so, without a technical report to analyze the root-cause of damage which at least prima facie appeared, to begin with, independent of each other. No such internal technical enquiry appears to have been instituted. Not only that has not been done, even after two opportunities by way of two joint meetings were offered by the surveyor and the insurer, even the specific technical tests and reports as required and insisted by the surveyor, which requisitioning we find not to be unreasonable or arbitrary, were not carried out or were declined, and when the surveyor himself carried out some of those tests, the results indicated non-fire damage to the turbine. On the contrary, though it is not the burden of the insurer to so establish the absence of chain of events as stated or claimed by the insured without establishing the same, the surveyor has positively and meaningfully analyzed the available material, Page 30 of 37 and himself carried out some tests, so as to come to a reasonable, logical and evidence based conclusion that the peril of machinery breakdown has operated not only independently of fire but as a matter of fact has operated before the onset of fire. The technical reports as requisitioned by the surveyor have neither been carried out nor the requisite reports submitted by the insured. The surveyor has also rightly, in para 12 of his report, concluded that there is violation of condition 7 of the policy as indeed the damaged items were not preserved in the originally damaged condition so as to subject the same to further technical analysis if required. It is also a settled law that the statutory report of the surveyor obtained under section 64 UM cannot lightly be brushed aside and is indeed a significant and critical piece of evidence. As such, we find no arbitrariness or unreasonableness in the well-reasoned survey report. Without itself establishing the chain of events as claimed, in our opinion, the insured cannot question and base its complaint on the ground that the surveyor has not been able to conclusively negate the insured's version and has relied on phrases like "most probable cause" or "most likely" etc. There is no negative burden on the insurer and if the surveyor, in the absence of discharge of burden by the insured, himself, on preponderance, attempted to establish that the version of the insured, in any case, gets dislodged on preponderance of probability, no fault can be found therein and no dispute can be raised by the insured merely by pointing out the mere "strong possibility" of alternate event as arrived at by the surveyor. As such, after careful consideration of the Triveni Report, Mr. Phatak's report, and the technical reports and evidence relied upon by the surveyor, we find no ground to disagree with his conclusions. Equally, we find no basis or ground to interfere with the well-reasoned grounds articulated by the insurer in response dated 24.01.2024 to the complainant's communication dated 13.01.2024 as under:Page 31 of 37
UKMANGAL SUGAR ETHANOL & CO-GENERATION INDUSTRIES LTD. Lvkmanga SUCCESS THROUGH TOTAL OEDlCAT Refi LSEClL/Admln/2013-14/1985 Date: 13/01/2014 To, Mr. Mohan Paranjape. ft arwft fk., I The Oriental Ins. Oo. Ltd.
Dy. General Manager i
* /RegfoMif Ofr'ce, f>uno.
The Oriental Insurance Co. Ltd, ( Posptch Srwiion
Mayfair Towers.-1* Floor,
• Pune-Mumbai Road.Wakadewadi, , 1 5 JAN
Shivaji Nagar, Puna411 005.
Subject: Fire Los® under Policy No: IBIJOOM1/2012/1100 I etw/received
Dear Str,
6$
We are surprised by your response received vide your letter ref DeptFire claims dated 3rt January 2014 as it merely contains a few details of some of the bills etc which either have been submitted by us or obtained by the Surveyor.,These details simply do not address any of our concerns we have been raising with you from the time the Fire took place. Having come to this stage now where you have finally offered us some amount as the fire loss we seek your exact feedback on the following points without any. ambiguity what so ever which we will treat as your,final response.
1. There was an actual, visible, accidental fire which has been fortunately recorded In a CD already available with you. The origin of this fire was apparently in the cable galleries belowthe Triveni Turbirierand the fire engulfed-the turbine bed and completely damaged the adjacent control room from where the TG was being synchronized at the time of this accident. Since the Turbine Control Room has been completely gutted in the fire the records of the turbine operation till the $ fire accident are unavailable which is but normal considering the gravity of the fire surrounding the turbine floor.
2. We refer Jo our earlier correspondence submitted to you starting with our Consultant.Mr. Wasudeo Phatak's report about the loss followed by our letters dated 10/06/2013 & 18/06/2013 which gives the factual situation prevalent at the site during and after the accidental fire. It now appears that the theory of proximate .cause being fire is completeiy being ignored/hot being accepted by you/Surveyor without giving any proof of any other peril being operative causing the loss. We completely disagree with the surveyor's report in this regard as . . stated in his Point No 2 on page 15 as the basis of his argument is not based on facts. Detail comment on the same Is In the next point below.Page 1 of 3 Page 32 of 37
SUGAR ETHAHOL 8 CO-GENERATION INDUSTRIES ITO.
Lekmangal SUCCESS IMROUGHTCHAX DtoiCMION -2-
3. Referring to Point no. 2 on page 15 of the Survey report, we are surprised to note that when the readings at the grid erid are recotded'with 15 minutes Interval he has proceeded and given minute wise readings of all the parameters which are fictitious and have no authentic back up. Further his outright rejection of Triveni's report on the possible cause of toss is also not acceptable as H is not based on any concrete proof about the theory the Surveyor is propagating. We do not know from'where' he'got such minute to minute readings about all the parameters (Siemens. Trivenl, Plant Load. Export Power) when only Siemens readings, are ■ available'and readings of Power Export are available with 15 minute duration. Further Ills contention that the Trivenl set was loaded from OMW to 13.474 MW from 10.08 to 1O;17, that is. in only 9 minutes, Is technically impossible as it is not possible to increase boiler load in such a short time to achieve the output figures quoted by the Surveyor. He has also neglected the auxiliary load of Triveni set in the figures he is mentioning which is obviously incorrect On page 16 of his report,he states that at 10.17 Siemens, set was stopped but the data which is already supplied to him on Siemen's set shows It was stopped at 10.24 after the fire was noticed. As regards the actual time of fire stated by Mr. Gaikwad, It Is absolutely Impossible to remember & note the exact time he saw the fire and there are errors in different watches which cannot be held as sacrosanct. During emergency such as this, who ® supposed to look at the watch for a correct time and that too when he was running out of the burning control room after noticing the fire. Merely making fuss about the time given by the person noticing the fire first and harping on It as the most Important disclosure is unacceptable.
4. Triveni turbine (which was in operation for years without any breakdown history) had been started to get synchronized with the grid which already had the Stemen's TG supplying power and all the readings of the grid power (15 minutes duration) being exported are available. We have also demonstrated that the Trivenl Turblne.-started in a normat manner and was being leaded, gradually as per standard procedure with Siemen's ' load being decreased proportionately thereby discarding any possibility of a breakdown in the Triveni set in our earlier correspondence.
5. We have further argued that after the fire accident, since the Trivenl Turbine floor was engulfed in Fire, emergency shutdown was resorted to which might have developed a.situation similar to a breakdown situation as anything can happen when you suddenly bring down a 3000 RPM turbfne'to 0. However all such eventualities are only as a result of Fire which becomes the proximate cause and Page 2 of 3 Page 33 of 37 r^LCKMAHGAl SUGAR ETHANOL 4 CO-GENERATION INOUS3RIES LTD.
nothing else as we have proved by demonstrating that Triveni set started normally,and was being loaded gradually till the fire was noticed. This completely ! rules out any possibility of MB as has been advocated by the Surveyor without i any back up/proof.
I
6. Further we are at a loss to understand the provision of betterment as applied by the Surveyor as he has deducted more than 1NR 2 Crores under this head. As he has erred even In interpreting the RIV clause initially, we feel he is not aware how the betterment clause is applied in working out an Insurance Claim. We had a turbine which was meant to produce 15 MW of power before the loss. We now have a turbine which produces exactly the same output, and has put us in exactly the same situation in which we were prior to the Iossl As the Triveni turbine which got damaged was of old design, it was replaced by a similar turbine of the same output by the available version. Whatever process improvements have been achieved can attract some fixed betterment percentage but out right rejecting ! things as has been done by the surveyor is absolutely not acceptable strictly as per the .clause of betterment as applied here. We need complete logical .explanation against each such deduction from-the Surveyor and his theory In deducting the amount on betterment for each and every amount disallowed to comment on this deduction. The papers made available throw no light on this Important aspect where our claim is getting reduced substantially.
7. As we have maintained that the entire loss is a direct effect of the accidental fire we do not agree to the Surveyor disallowing a major portion of the loss purportedly due to MB which he is unable to prove by any authentic data. In conclusion we seek your Inputs on two major issues, first being about the entire toss as per our final claim bill-being payable to ua due to the fact that the I proximate cause is fire only subject to deduction accounting for reasonable betterment percentage with proper logic and full explanation from the Surveyor I with detailed back up. We are rejecting the final amount being offered to us vide your tetter under reference for reasons explained above and seek your urgent communication to appeal our case at appropriate forum expeditiously. Please let us know;to.whom we need to approach for effectively addressing our long outstanding.grtevance and your immediate response In this regard will be highly apppeeteted.
I (Mahesh f sshmukh)
Chairman
Copy to: MrJ'-S.Murthy.Regional Manager, Oriental Insurance Co. Ltd, Pune Divisional Manager, Oriental Insurance Co. Ltd Solapur Page 34 of 37 ♦ i 11> THE OK1ENTALINSURANCE CO. LTD Regional Officcv Mayfair Towers k V1 Floor, Pune-.Mumbai Road, Wakdewadi, Pune 411 005 Tel: 020 25512001.25512489 Fax 020 25512561 Dept.: Fine claims Dale : 24.1.2014 To The Chairman. ' IWs. Lokmangal Sugar, Ethanol and Co-Generation Industries Ltd Bhandarkawathe, Di st. Solapur Dear Sir, Reg: Fire.loss under Pol No.161900/1V2012/1100 We refer to your letter dated 13.01.2014 in regard to the above claim and noted the contents therein.
We would like to submit our pointwise replies as under in response to your above stated letter.:
At the outset we reject your contention that our letter dated 3,c January, 2014 contains few details of some of the bills etc. The factual position is that the letter dated 03.1.14 has Annexure attached to it which contained particulars of 79 documents including all the bills submitted by you which have been relied by Surveyor for assessing the loss For ready reference the said annexure is attached.
1. As per your own admission the TG was being synchronized at the time of the loss.
Hence we cannot rule out the probability of break down as the onustorigin for cause of fire could not be proved.
► CD reflects !fire but not the origin of fire. As per the CD. on close and critical examination, the nature of fire is lubricating oil fire.
2. Proximate cause in this case is duly considered and points raised under point No. 2 of page 15 of survey report has lot of relevance to draw a conclusion that the loss to turbine is because of breakdown and in support of this we have heavily relied on Mr.V .M. Gaikwad's statement (incidence narration), wherem he has clearly stated that he had to trip the Turbine by emergency stop bulton after seeing smoke coming from cable trench below the control panel. Subsequently he heard big sound in Triveni Turbine.
It is worthwhile to note that as per the layout plan of Power house submitted by you, the location of Turbine is away from cable trench. The fire has originated in r the cable trench below the control panel and damages were severe to control room and then decreasing in its severity towards the TG set.
1^ Since fire did hot reach inside the Turbine casing; rotor, casing,diaphragm and other internal parts were not fire damaged and as such excluded from the asssessment of loss.
Your consultant, Mr. V Phatak's report (appointed by you on 23.4.2013) about the loss is based on the input given by you and is almost 12 months after the loss by fire and more than 2 months after the reinstatement was completed.
3. Boiler Log. Fire Brigade in House log and Siemens log sheets were provided by you. Grid tog and Siemens tog were also provided by you to the surveyor. Therefore readings provided by the log sheets cannot be called as fiction, the analysis given bythe surveyor in his report is correct and based on facts provided by you.
Minute to minute records were from Siemens TG log. Calcuations were based on formula given by you to the surveyor. So there is no fiction in the Survey report. As contended by you, Siemens set has stopped at 10.24 hrs, however as per the statement of Mr. Gaikwad he noticed smoke at 10.30 hrs This indicated that the breakdown preceded the fire.
b 4. Your contention that the Triveni Turbine started in a normal manner and was being loaded gradually as per standard procedure with Siemen's load being decreased proportionately thereby discarding any possibility of a breakdown in the Triveni se». However from the data available, it is observed that the loading of Turbine in nine minutes is not a normal( as per start up procedure of Triveni)
5. The avaible data indicates Triveni Turbine set has not started normally as per start up procedure and you have stated that when emergency shut down is resorted it may develops a situation similar to a breakdown situation as anything can happen when you suddenly bring down a 3000RPM turbine to 0. This speaks that human intervention breaks the chain of events and your theory of proximate cause as fire is not sustainable.
6. Pointwise explanation was given by surveyor in page no.22 & 23 of the survey report supported by Annexure I attached to Survey Report..
7. Although the documents in support of the claim were submitted by you to surveyor on 21.2.13, i.e, 10 months after the fire, fair chance by way of arranging joint meetings with you, the surveyor and ourselves was given wherein you were % requested to prove that the damage to machinery is due to fire and on certain issues you have agreed for lab tests but subsequently contended that tests are not required. Please refer to Policy condition No,6 (b) which is reproduced below.
"Particulars of all other insurance, if any The Insured shall also at all times at his own expense produce, procure and give to the Company ail such further particulars, plans, specification books, vouchers, invoices, duplicates or copies thereof, documents, investigation reports (internal/external), proofs and information with respect to the claim and the origin and cause of the loss and the circumstances under which the loss or damage occurred, and any matter touching the liability or the amount of the liability of the Company as may be reasonably required by or on behalf of the Company together with a declaration on oath or in other legal form of the truth of the claim and of any matters connected therewith.
No claim under this policy shall be payable unless the terms of this condition have been complied with In this case you have failed to prove that the loss to machinery is caused due to fire.1 1 Page 36 of 37
* We reiterate that approval of your claim for (bl Rs. 1.41,75.330/- being full and final settlement subject to recovery of reinstatement premium is as per the terms and conditions of the policy. In case you are not satisfied with .... i our decision,you may approach :
Customer Service Deptt. The Orienta Insurance Co. Ltd- Head Office, Oriental Hous6, Asaf Ali Road. A- 25/27, New Delhi - 110 002 Thanking you and assuring you our best services, Yours faithfully.
18.2 Thus, when the insurer has followed and acted in accordance with the conclusions in the survey report after duly applying mind, and has already offered the loss assessed by the Surveyor in para 14 of the survey report, we are unable to find any deficiency in service on the part of the insurer.
19. However, we would direct the insurer to make the payment of Rs. 1,41,75,830/-
as was offered on 27.12.2013, along with simple interest at the rate of 9% thereon for the period 27.12.2013 till the date of actual payment, within a period of 2 months from the date of this order. Failure to make the payment shall entail interest at the rate of 12% from 27.04.2026 till the date of actual payment on the amount remaining unpaid on 27.04.2026.
20 According, the complaint is allowed in part in terms of the above order.
Sd/-
( A.P. SAHI, J.) PRESIDENT Sd/-
( BHARATKUMAR PANDYA ) pawan/aj MEMBER Page 37 of 37