National Consumer Disputes Redressal
M/S. Soluble Silicate (P) Ltd. vs Branch Manager, New India Assurance Co. ... on 5 July, 2018
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 238 OF 2014 (Against the Order dated 21/03/2014 in Complaint No. 10/2010 of the State Commission West Bengal) 1. M/S. SOLUBLE SILICATE (P) LTD. DIR. MR. ANKUR PODDAR, BADU 1ST MAIN ROAD, P.O. BADU, NORTH 24 PARGANAS (MADHYAMGRAM) WEST BENGAL ...........Appellant(s) Versus 1. BRANCH MANAGER, NEW INDIA ASSURANCE CO. LTD. & ANR. THAKURPUKUR BRANCH, 39, DIAMOND HARBOUR ROAD, KOLKATA-700008 2. STATE BANK OF INDIA SALT LAKE COMMERCIAL BRANCH, KOLKATA-700064 ...........Respondent(s)
BEFORE: HON'BLE MR. PREM NARAIN,PRESIDING MEMBER
For the Appellant : Mr. Sujoy Kumar Basu, Advocate For the Respondent : For the Respondent no.1 : Mr. S.M. Tripathi, Advocate
For the Respondent no.2 : Nemo
Dated : 05 Jul 2018 ORDER
This first appeal has been filed by the appellant, M/s. Soluble Silicate (P) Ltd. against the order dated 21.3.2014 passed by the State Commission in CC No.10 of 2010.
2. In brief the case of the appellant/complainant is that the appellant/complainant obtained one Standard Fire and Special Perils Policy for a sum of Rs.1,25,00000/- (One crore and twenty five lakh ) only covering the risk of stock of raw materials and stock-in-process i.e., finished and semi-finished products and packing materials. The Policy, bearing No. 510603 /11 /08 /00000007 was valid from 06.04.2008 to 05.04.2009. The entire stock-in-trade of the Complainant firm was hypothecated to the SBI, Commercial Branch , Salt Lake , Kolkata. On 15.08.2008, at about 10.30 A.M , due to inundation of rain water following continuous rain, the complete eastern wall of the warehouse had collapsed and fallen together with a very large number of bags of soda Ash & CRS in the pond within the factory compound. As a result , the stocks of Soda Ash & CRS (Crushed Refined Soda) were badly affected causing loss to the extent of Rs.42,00,000/- (Forty Two Lakh )only. OP No. 1, being the Insurance Company, was informed of the incident immediately with a request to depute a Surveyor for survey and assessment of loss. The Insurance Company engaged M/s N.T. Kothari to survey and assess the loss. On 15.08.2008 itself, the said Surveyor visited the affected place, but nothing was heard from them. Thereafter, Mr. A. Partranabish, was appointed by OP No.1 insurance company, who visited the factory on 22.08.2008, carried out inspection and submitted his report on 23.08.2008 to the Insurance Company. Then, M/s. M. N. Zutshi was appointed to conduct the final survey. But, in spite of appointment of three Surveyors, the Insurance Company did not settle the claim of the Complainant, though, among other documents, the copies of Stock Statements for June and July 2008 as submitted to the Bank and the Auditors Report showing Balance Sheet and Profit and Loss account had been filed. The OP No.1 having requested vide their letter dated 07.01.2009 to furnish a copy of the weather/rainfall report of the Regional Meterological Centre, Alipore, pertaining to Madhyamgram / Barasat Area for the period from 13.08.2008 to 15.08.2008, the same was obtained and filed. But, no action was still taken to settle the claim even upon having received the report of M/s M.N. Zutshi assessing the loss to the extent of Rs.25,68,588/-. Being aggrieved, the Complainant filed a consumer complaint No. CC/23/2009 before the State Commission which was contested by the OP. During pendency of the said complaint case, the Insurance Company repudiated the claim of the Complainant. The State Commission gave the Complainant liberty to challenge the repudiation order in appropriate Forum with direction to the OP to pay a sum of Rs.10,000/- to the Complainant on the ground of deficiency in service in delaying the settlement of the claim. Therefore, the present Complaint Case No.10/2010 was filed challenging repudiation before the State Commission claiming Rs.42 lakhs from the insurance company.
3. This complaint was also resisted by the insurance company by stating that the complaint no.23 of 2009 was filed pursuant to the same incident and the State Commission disposed of that complaint by directing the OP insurance company to pay a sum of Rs.10,000/- to the complainant on the ground of deficiency in service in delaying the settlement of the claim and gave liberty to complainant to challenge the repudiation before an appropriate forum. It was also stated that no surveyor has found the effect of inundation on the wall that collapsed and no peril of the policy was attracted for the incident that caused loss The State Commission after considering submissions of both the parties dismissed the complaint vide order dated 21.3.2014.
4. Hence the present appeal.
5. Heard the learned counsel for the parties and perused the record.
6. Learned counsel for the appellant stated that from the report of Meteorological Department and from local newspapers, it can be very easily assessed that there was heavy rain in the area on 14.8.2008 and the water was overflowing from the nearby pond and due to this inundation, the eastern wall of the godown collapsed and the soda ash bags fell down into the pond. As soda ash is soluble in water, the appellant could only rescue the empty bags from the water and huge loss occurred to the appellant. The learned counsel mentioned that repudiation letter stated that the loss and damage suffered by the appellant was not covered under any of the perils mentioned in the policy. It was stated that clearly the peril of inundation is attracted in the present case. The surveyor has reported that the pond had filled up completely and was overflowing. It was also reported that in the early hours of 15/08/2008, the overflow from the pond had flooded the entire area from the boundary wall on the east to the Boiler Shed 2. The surveyor M.N. Zutshi in his final report dated 3.12.2008 has clearly concluded that the insurable interest of the insured in respect of the property damaged stands fully established in terms of their verification of the insured's books and records. No breach of utmost good faith has come to their notice in the course of their enquiry pertaining to the loss.
7. The first surveyor M/s. N.T. Kothari & Co. have indicated vide report dated 26.8.2008 that on cursory checking an estimated loss of Rs.35 to 40 lakhs has been suffered by the complainant. However, as another surveyor was appointed so the first surveyor N. T. Kothari & Co. did not carry on with the whole survey. The insurance company appointed another surveyor. Learned counsel further stated that Mr. A. Patronbis was appointed on 20.8.2008 who submitted his report on 23.8.2008 and assessed the loss of Rs.31 lakhs. It was emphasized by the learned counsel that all the three surveyors in a way have assessed the loss to the tune ranging from 25 lakhs to Rs.35 lakhs. The final surveyor Mr. M.N. Zutshi has assessed the loss of Rs.25,68,588/- and has also recommended the same. However, the insurance company has repudiated the claim on the ground that no peril of the policy was attracted in the matter. It was argued that first of all insurance company is not authorized to change so many surveyors to get a tailor-made report and moreover, when the final surveyor has clearly recommended the loss of Rs.25,68,588/- payable to the complainant, then the insurance company has no ground to repudiate the claim. The report of the surveyor is a very important document and cannot be brushed aside without any cogent reason. The insurance company has not given any specific reason in the repudiation letter to counter the report of the final surveyor Mr. M.N.Zutshi. Mr. Zutshi has clearly found the peril of inundation is attracted in the present case and therefore, this fact cannot be denied by the insurance company as they have filed no other proof or document to show that there was no inundation. Learned counsel emphasized the following observation of the final surveyor' report dated 3.12.2008.
"15. Cause: As discussed hereinabove it appears that the overflow from the pond inundated the entire area up to the Boiler Shed No.2 i.e. past the open gate of the warehouse on the south. Therefore, it is obvious that the water entered the warehouse through the open gate, flowed down the passage (left for movement) and aided by the slight incline/slope of the floor, accumulated all along the east wall (pond side), soaked and seeped through to the rows beyond from three sides. The Soda Ash/CRS dissolved with evolution of gas and the bags collapsed. It appears that the bags stacked several ft. high slid, disbalanced and toppled against the east wall en masse that gave way under the sudden impact load and collapsed into the pond together with the bags.
Warranties: attached to the policy were found to have been observed.
Agreed Bank Clause: State Bank of India, Salt lake Commercial Branch has lien on the interest insured under the Policy and payment is subject to the Agreed Bank Clause.
Conclusion: The insurable interest of the insured in respect of the property damaged stands fully established in terms of our verification of the insured's books and records. No breach of utmost good faith has come to our notice in the course of our enquiry pertaining to the loss. There was no operation of any specific exclusion/exception as enumerated in the policy issued by the insurer. The indemnification has been fairly and reasonably worked out as per terms and conditions of the Policy issued and commercial & financial practice prevailing.
8. The insurance company later on again tried to get the preliminary survey report from N.T. Kothari & Co.. He submitted the report after 13 months. In this report the surveyor N.T. Kothari who was earlier appointed has stated that he visited the factory on 15.8.2008. First of all, it is not possible to remember so many details after one year and that too when he submitted preliminary survey report dated 26.8.2008. He should have given all the details in that report. Therefore, the learned counsel alleged that this report has been obtained by the insurance company to counter the report of final surveyor Mr. M.N. Zutshi. There is no basis for this report dated 19.8.2009 of the surveyor N.T. Kothari because no photographs or no documents have been submitted with this report.
9. Learned counsel for the appellant also stated that the insurance company appointed yet another alleged expert surveyor, Mr. Dilip Kumar Saha, Chartered Accountant for assessing the loss. The questionnaire was given to Mr.Dilip Kumar Saha who has submitted his report on 1.11.2009 wherein he has assessed the loss of Rs.5,71,728/- Questions were put to Mr. Saha and he gave evasive replies to most of the questions. It is very surprising that even after three surveyors, who have given reports in favour of the complainant, the insurance company appointed the fourth expert surveyor who is a chartered accountant to get a tailor made report with assessment of loss of Rs.5,71,728/-.
10. In support, learned counsel referred to the case of New India Assurance Company Ltd. vs. M/s. Sehrawat India (P) Ltd., 2009 (3) CPR 449 NC) wherein it is held that the report of statutory surveyor has to be given due importance in arriving at the conclusion about the net loss suffered by the consumer unless there is substantial evidence to the contrary.
11. In relation to the inundation, learned counsel referred to the judgment passed by this Commission in Oriental Insurance company Ltd. vs. M/s. R.P. Bricks, First Appeal No. 782 of 2007 decided on 15.5.2013, wherein it has been observed as under:
"It is true that no water body like river or pond was situated in the nearby area of the complainant's unit, but, that by itself is no ground to conclude that there was no flood or inundation. In fact, both these terms flood and inundation are synonymous which as per Chamber's Dictionary means "over flowing". As per Webster's Comprehensive dictionary "inundation" means a flood, a condition of super abundance. Words inundate, flood, over flow are treated as synonyms.
12. On the basis of the above judgement, the learned counsel argued that the case of the appellant is on a better footing as there exists a pond which was overflowing and caused inundation as reported by the surveyor.
13. Similarly, learned counsel referred to the judgment of this Commission in Nawal Kishore Choudhary Vs. New India Assurance Company Ltd. and another, 2016(2) CPR 465 (NC), wherein it has been held that even if rain water enters through flooring and if walls are unable to withstand its pressure, that would also be covered under term 'inundation'.
14. Learned counsel further argued that the final surveyor has clearly found that water had entered in the godown and due to this water, the wall collapsed. Therefore, the loss would be considered as arising out of inundation as held by the Hon'ble Supreme Court in United India Insurance company Ltd. Vs. M/s.Kiran Combers and Spinners, 2007 (1) CPR 76 (SC), wherein the following has been observed:
"The question is what aggravated or accentuated this, factory is in place for more than 12 years and it is on account of flood water entering in factory that has caused this damage. So called defect was aggravated on account of flooding of the water in the premises of the factory, if the flood water had not entered into the factory, perhaps the construction which stood good for 12 years, would have lasted long."
15. The learned counsel further stated that the final surveyor's report was dated 3.12.2008 which must have been received by the insurance company within two weeks. However, the claim has been repudiated on 13.11.2009. This Commission in Madan Lal Gupta Vs. Divisional Manager, National Insurance Company Ltd., 2017 (2) CPR 334 (NC) has held that after getting the survey report, the insurance company should decide the claim either by accepting it or by rejecting it within a period of 30 days from the date of receipt of surveyor's report. Thus, the deficiency on the part of the insurance company in the present case is evident. Actually the insurance company was trying to get some report which could counter the report of the final report of Mr. M.N. Zutshi and finally they got the report dated 19.8.2009 from M/s. N.T. Kothari, the preliminary surveyor.
16. On the other hand, learned counsel for the insurance company/respondent no.1 stated that Meteorological Department does not indicate exceptional heavy rain and even no flooding of water or inundation was reported from the local area. The complainant himself in declaration dated 15.8.2008 stated that :
"On 14.8.2008 at about 14.00 Hrs. heavy rain started, which continued for about 12-13 hours and as a result some areas of our locality were inundated but fortunately our factory compound was not inundated as it was elevated."
17. Learned counsel for the respondent no.1 stated that the State Commission has gone into the detailed reasons for collapsing of the wall and has clearly found that no peril of the policy was attracted for this collapse. In fact, the State Commission has clearly opined that the wall has collapsed due to weight of the bags which were leaning against the wall. The declaration of the complainant is dated 15.8.2008 and it has been clearly stated therein that the factory premises were at a higher level and the factory premise was not inundated, even though some nearby areas were flooded. The surveyor has visited on 15.8.2008 and as per his report inundation cannot be accepted in contrast to the declaration given by the complainant themselves. Moreover, the preliminary surveyor did not give the complete report after his visit because the insurance company had appointed another surveyor Mr. M.N. Zutshi for the final survey. However, when the insurance company asked him to submit the detailed preliminary report, he has given his report dated 19.8.2009, wherein he has clarified that:
"Compound of the factory was found absolutely dry and there were no evidences of water marks found either on the outer walls of the building and/or sheds inside the factory. Some labourers were found engaged in the Raw Material Godown for removal of bags and /or stacking/re-stacking of bags.
Upon entering into the Raw material godown, we found no evidence of water marks either on the inner walls and/or on the floor of the godown and all the bags said to contain Soda Ash bags lying in the godown found absolutely sound without having any water marks on them.
Bags said to contain Soda Ash weighing each about 50.200 kgs. Gross were found stacked just along the walls without leaving any space in between the stacks and the walls. Normally, space between the stacks and the walls are left easy movement and to avoid direct load on the walls.
Wall on eastern side facing the Pond made of partly bricks (bottom) and partly corrugated sheets (upper) found collapsed and/or the corrugated sheets found to be sheared/broken.
Water level of the pond found below the surface level.
Southern side bank of the Pond found absolutely dry with dry garbage and/or waster here and there.
Quite a number of bags said to contain Soda Ash found lying on the puccca brick guard wall of the Pond on Raw material godown side, hence, it was not possible to check/examine the condition of the guard wall. However, water level of the Pond on that side i.e. Raw material godown side found to be below the surface level, to ensure no inundation from the side of Pond, one labourer was kept standing by the side of the godown near the guard wall while taking photographs which will show that there was no overflow of water on that side which could contribute inundation of the Raw material godown."
18 . Learned counsel for respondent no.1 further emphasized that even Metrological Department's report filed by the complainant do not reveal any heavy rains during the period from 13.8.2008 to 15.8.2008. No further document has been filed which shows heavy rains in the area. It was further pointed out that the estimate given by the Chayan Kumar Loadh, Civil Engineer on the request of the complainant was given for construction of the wall as Rs.1,05,000/-. This itself speaks about the quality of the wall which was there earlier. This supports the claim of the insurance company that the wall must have collapsed due to the weight of the soda ash bags. After receiving the final surveyor's report, the insurance company issued a letter to the surveyor for certain clarifications. However, no clarification was given by the final surveyor. Then the insurance company had to resort to get the report of preliminary surveyor M/s. N.T. Kothari and Co. who has clearly stated that there was no inundation on 15.8.2008 when he visited the site.
19. Learned counsel further mentioned that the State Commission has analysed the report of the final surveyor Mr. M.N. Zutshi and has made the following observation:
"It reveals form the final survey report submitted by Mr. M.N. Zutshi that although the complete wall had fallen, no damage to the construction below, i.e., plinth/foundation was found, nor was there any evidence of subsidence visible to the naked eye. Going by the observations of the final surveyor appointed by the OP insurance company and also from perusal of the contents of the letter of Mr. Chayan Kumar Loadh, Civil Engineer, appointed by the Complainant who stated in his letter dated 09.09.2008 that the foundation up to the ground level was sound , it can be concluded that subsidence was not at all a cause of the fall of the wall which broke down and fell into the pond together with substantial number of Soda Ash Bags.
On the question of inundation which is asserted by the Complainant, we find that - the Director of the Complainant firm himself declared that though some areas of their locality were inundated but fortunately their factory compound was not inundated as it was elevated. His declaration does not support the statement that the entire eastern side of material godown was inundated and or subsided to the pond. The very first report of the spot surveyor i.e., N.T. Kothari and Company shows that the wall which was partly brick built and partly built with corrugated sheets did not mention anything about inundation caused by the overflow of water from the adjacent pond. Even if their clarificatory reply dated 19.08.2009 is not given weightage because of the fact , as pointed out by the Ld. Advocate of the Complainant during hearing , that such clarifications were given after about a year from the date of incident , it can be easily understood that had there been any inundation within the factory compound on the very first day of their visit to the factory compound , they would have certainly mentioned in their letter dated 26.08.2008.
The report of Mr. M.N. Zutshi that the water of the pond entered the warehouse through the open gate does not stand substantiated with any evidence like mark of inundation on the floor or mark on the Soda Ash bags lying on the floor. The cause of fall of the eastern wall of the godown does not stand proved to have happened by any inundation. The Complainants claim that the loss was caused by inundation or subsidence has not been proved with material evidence. The question of payment of compensation for the loss whatever be the amount assessed by the final Surveyor or the expert i.e., Mr. D.K. Saha, deserves no consideration. The complaint having not been established with material evidence does not stand. No relief can be awarded in the absence of deficiency in service on the part of the OP Insurance Company."
20. Learned counsel further mentioned that insurance company has also appointed an independent expert surveyor Mr. Dilip Kumar Saha, Chartered Accountant who submitted his report on 11.11.2009 wherein he has assessed the loss of Rs.5,71,728/-, though he also stated that no peril of the policy was attracted and the collapse of the eastern wall was due to unsystematic stacking of the soda ash bags.
21. I have given a thoughtful consideration to the arguments advanced by learned counsel for the parties and have examined the material on record.
22. Though different surveyors were appointed by the insurance company at different point of time, however, the final report was given only by one surveyor Mr. M.N. Zutshi who has assessed the loss of Rs.25,68,588/-. The first surveyor M/s. N.T. Kothari had not submitted any preliminary report giving details of loss or position on ground. However, he submitted another report dated 19.8.2009, roughly after one year, wherein he has given details of the position existing at the time of his visit. The contents of this letter become questionable because the job of the spot surveyor was to give the instant report on the position prevailing on ground, however, the same was not given and the position has been given in the subsequent report filed after roughly one year. It has been contended by the complainant that the correct position cannot be remembered by the surveyor after one year and this is a tailor made report submitted to the insurance company on demand. I agree with the contention of the learned counsel for the complainant that this report cannot be accepted as the same should have been filed as part of the preliminary survey report submitted by the surveyor M/s. N.T. Kothari. The other surveyors have not filed any complete report and they are not being considered here.
23. The final surveyor Mr. M.N. Zutshi has concluded that the area near the warehouse was inundated and water entered into the warehouse which ultimately caused eastern wall to collapse and the soda ash bags fell down into the nearby pond. This theory of the surveyor was not accepted by the State Commission as this was against the declaration given by the complainant himself as well as this was against the report of the Engineer dated 9.9.2008 stating that foundation upto the ground level was sound. Thus, the State Commission concluded that subsidence was not the cause of fall of the eastern wall. The State Commission has further observed that the report of the Engineer mentions that although the complete wall had fallen, no damage to the construction below i.e., plinth/foundation was found, nor was there any evidence of subsidence visible to the naked eye. Though the State Commission has come up with strong arguments for not accepting the report of Mr. M.N. Zutshi that the water entered the warehouse, however, surveyors are appointed under the provisions of Insurance Act, 1938 and they are supposed to be independent surveyors giving the factual report. In any case, the insurance company has to appoint a surveyor and in the present matter the insurance company has appointed 4 surveyors including the expert Mr. Dilip Kumar Saha. There is no doubt that the wall has fallen and there has been damage of soda ash bags. One thing is also certain that even if the water had entered the godown and even if it had caused the fall of the eastern wall, the soda ash bags would not fall into the pond until they were stacked leaning against the wall itself. Actually even if the final survey report is taken into consideration that the water entered into the godown and if the bags were properly stacked without leaning and resting against the wall, then at the most, one or two bags which were in contact with the ground will only be damaged. From the photographs available on record, it is seen that there would be around 20 bags kept from bottom to top and even if two bags are affected by water on ground in the godown, then also only 10% of the bags would be damaged. The complainant has also filed an estimate given by an engineer vide letter dated 9.9.2008 for construction of the fallen eastern wall and its estimate is only for Rs.1,05,000/-. Thus, even if the theory of the surveyor regarding inundation is accepted, the complainant would be entitled only to the cost of construction of the wall which is Rs.1,05,000/- and 10% of the total loss assessed by the surveyor as explained above. Obviously, the complainant is not entitled to any loss due to fall of soda ash bags into the pond because that is on account of wrong stacking of the bags leaning towards the wall.
24. Based on the above discussion, the appeal is partly allowed and the order dated 21.3.2014 of the State Commission is set aside. The respondent insurance company is directed to pay Rs.3,61,859/- (Rs.1,05,000/- for construction of the wall plus 10% of loss assessed by the final surveyor Mr. M.N. Zutshi i.e. 10% of Rs.25,68,588/- ) to the complainant within a period of 45 days with interest @ 5% p.a. from the date of filing of the complaint i.e. 19.2.2010.
25. No order as to cost.
...................... PREM NARAIN PRESIDING MEMBER