National Consumer Disputes Redressal
Divisional Manager, New India ... vs M/S. Oricon Enterprises Ltd. on 5 March, 2019
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 367 OF 2013 (Against the Order dated 18/03/2013 in Complaint No. 58/2008 of the State Commission Maharashtra) 1. DIVISIONAL MANAGER, NEW INDIA ASSURANCE CO. LTD. The New India Assurance Co. Ltc.
D.O. No. 130600, Gurudwara Building,
Dr. Ambedkar Road, Dadar(E), Mumbai Maharashtra ...........Appellant(s) Versus 1. M/S. ORICON ENTERPRISES LTD. 1076, Dr. E. Moses road,
P.B. No. 6584, Worli,
Mumbai Maharashtra ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN,PRESIDING MEMBER HON'BLE MR. DR. S.M. KANTIKAR,MEMBER
For the Appellant : Mr. Asim Vidyarthi, Advocate For the Respondent : Mr. S. R. Singh, Advocate
Dated : 05 Mar 2019 ORDER
JUDGMENT
JUSTICE V.K.JAIN (ORAL) The complainant obtained an insurance policy from the appellant in First Appeal No. 367/2013, which is the respondent in Revision Petition No. 3475/2014 in respect of its building, stock of normal Pentane, stock of solvents, finished goods, furnace oil etc. at Gurudwara Building, Dr. Ambedkar Road, Dadar, Mumbai for the period from 10.04.2006 to 09.04.2007. During the subsistence of the said insurance policy on 24.04.2006, there was an incident of subsidence sinking the earth surface at the factory of the complainant and the foundation of one of the tanks erected in the said building got tilted to one side, resulting in damage to the tank as well as the liquid stock stored in it. The assessor appointed by the insurer assessed the loss of the stock of pentane at Rs. 38,89,358/-. He, however, did not recommend the reimbursement in respect of the loss of the stock on the ground that the said loss was not covered under the insurance policy. The compensation for the damage to the tank was duly paid to the complainants. Since the compensation for the loss of the stock was not paid, the complainant approached the concerned State Commission by way of a consumer complaint, claiming the said loss as well as the interest not only on the claim in respect of the liquid stock, but also on the claim paid for the damage to the tank.
2. The complaint was resisted by the insurer primarily on the ground that the damage to the stock was not covered under the insurance policy and the complainant had been paid a sum of Rs. 41,14,010/-, in full and final settlement of the claim.
3. The State Commission, vide impugned order dated 18.03.2013, directed the insurer to pay a sum of Rs. 38,89,358/- to the complainant alongwith interest @ 9% per annum. Being aggrieved from the order passed by the State Commission, the appellant/insured is before us by way of First Appeal No. 367/2013. Since the State Commission did not specify the period for which interest would be payable @ 9% per annum, Revision Petition No. 3475/2014 has been filed by the complainant seeking necessary clarification/direction in this regard.
4. The insurance policy to the extent it is relied upon by the insurer reads as under:
"VIII. Subsidence and Landslide including Rock slide Loss, Destruction or damage directly caused by Subsidence of part of the site on which the property stands or Landslide/ Rock slide excluding:
a) the normal cracking, settlement or bedding down of new structures
b) the settlement or movement of made up ground
c) coastal or river erosion
d) defective design or workmanship or use of defective materials
e) demolition, construction, structural alterations or repair of any property or groundwork or excavations."
Thus the only question which arises for our consideration in the appeal is as to whether the damage to the liquid stock stored in the tank happened directly due to subsidence of the site where the tank had been erected or not. The report of the surveyor to the extent it is relevant reads as under:
"Opinion on referred peril We opine:
The damage directly due to subsidence, is to the tank in which pentane (stock) is stored.
This has resulted in the tank tilting; thereby causig stress to the base plate of the tank, resulting in opening of the plate & further spiling of the stocks. The spilling of stocks is due to the conditions that in a case of subsidence the direct damage would be admitted.
In view of the above the loss to the stocks may not be admissible the same not being directly due to subsidence; but due to opening of the base plate."
5. A letter of the surveyor dated 30.12.2006, whereby clarification was given by him to the insurer, reads as under:
"(1) The shift in centre of gravity of the liquid mass cannot be directly attributed to subsidence. As explained in our reports; due to subsidence the asset comprising of foundation and the tank together has tilted, damaging the foundation along with the tank.
(2) The foundation and the tank installed on it (one asset together), has tilted due to subsidence and it is because of the tilt, the storage pattern of the pentane has changed in the tank from the original cylindrical form to triangular form resulting in shift of centre of gravity. It is because of this change in storage pattern/shift of C.G. that stresses were developed at the base plate rupturing the same and consequent spillage of pentane.
(3) The damages/loss to the foundation, tank and the stock cannot be considered as one event but area a chain of events. The damage / tilt to the tank along with the foundation (being one asset) is directly due to subsidence and the spillage of pentane is due to rupturing of the base plate."
6. On the careful perusal of the report of the surveyor and his clarification dated 30.12.2006, we find ourselves unable to agree with him. It is an admitted position before us that the liquid stock had been stored in the very same tanker in respect of the damage to which the loss had been claimed by the surveyor. The damage to the tank took place when it got tilted on account of the subsidence. The liquid stock which had been stored in the said tanker also got damaged in the same process and because of the very same reason. We are unable to accept that the subsidence was only a proximate cause and not the direct cause of the damage to the stock which had been stored in the tank. In our view, in the facts and circumstances of the case, both the tank as well as the stock got damaged because of one and the same reason, the said reason being the subsidence which resulted in tilting of the tank, causing damage not only to the tank but also to the stock which had been stored in it. Therefore, the view taken by the State Commission, does not call for any interference by this Commission in exercise of its appellate jurisdiction.
7. As far as interest is concerned, in view of the Regulation 9 of the IRDA (Protection of Policyholders' Interest) Regulations, 2002, the same would be payable w.e.f. six months from the date on which the claim was submitted.
8. For the reasons stated hereinabove, the appeal as well as the revision petition are disposed of with the following directions:
(i) The insurer shall pay a sum of Rs. 38,89,358/- to the complainant alongwith interest on that amount @ 9% per annum w.e.f. six months from the date on which the claim was submitted till the date of payment.
(ii) There shall be no order as to costs. (iii) The payment in terms of this order shall be made within three months from today. (iv) The interest on the amount which the insurer had deposited before this Commission shall be payable only till the date on which the said amount was deposited.
......................J V.K. JAIN PRESIDING MEMBER ...................... DR. S.M. KANTIKAR MEMBER