State Consumer Disputes Redressal Commission
Nanditaas vs New India Ass. Co.Ltd. on 28 July, 2017
IN THE STATE COMMISSION : DELHI
( Co n s t i t u t e d u n d e r S e c t i o n 9 o f t h e Co n s u m e r P r o t e c t i o n A c t , 1 9 8 6 )
Date of Decision: 280/ .07.2017
Complaint Case No.122/2013
M/s. Nandeetas,
Through its proprietor,
Mrs. Nandita Shaunak,
139-M, Sector -7, Phase-II,
IMT Manesar, Haryana. .... Complainant
Versus
1. The New India Assurance Company,
7E, Jhandewalan Extension,
New Delhi -110005.
2. Mr. J.P. Shekand,
Dy. General Manager,
The New India Assurance Company,
7E, Jhandewalan Extension,
New Delhi -110005. ... Opposite Parties
CORAM
Justice Veena Birbal, President
Salma Noor, Member
1. W h e th e r r e p o r te r s o f l o c a l n e ws p a p e r b e a l lo we d to s e e th e j u d g m e n t?
2. To b e r e f e r r e d t o th e r e p o r te r o r n o t?
Justice Veena Birbal, President
1. Mrs. Nandita Shaunik proprietor of M/s. Nadeetas has filed the present complaint under Section 17 of the Consumer Protection Act, 1986 (in short, "the Act") wherein it is stated that the Page 1 of 12 complainant is engaged in the business of export of exclusive hand embroidered and beaded garments etc. since the year 2000.. It is alleged that the manufacturing activities for the purpose of export of the aforesaid products are being carried out at its factory premises which is spread over 1800 sq. ft. with a building comprising of four floors, in the town of Manesar, District Gurgaon, Haryana. It is alleged that in the year 2007 in order to expand its business, the complainant had built a factory premises on an environment friendly model and had engaged the services of one M/s. Skyarch Roofs Pvt. Ltd. as well as M/s. Fabcons. It is alleged that as per the remodeling plan, the roof of the factory premises was to include a newly constructed central dome made of high quality polycarbonate sheet installed on a central eclipse with a hydraulic system attached to it for the purpose of opening and closing the central dome. It is alleged that M/s. Skyarch fabricated and installed a central dome in the factory premises for a total cost of Rs.40,00,000/-. The complainant had paid Rs.40,00,000/- by way of five cheques details of which have been given in the complaint. It is alleged that it took five months to install heavy dome weighing nearly 17 tonnes.
2. It is alleged that from the date of installation till the year 2012, the central dome served a valuable purpose to the complainant in terms of conserving energy by allowing natural light and air to flow Page 2 of 12 in the factory premises as well as producing better aesthetic to the premises. It is alleged that the complainant has from time to time taken Standard Fire and Special Perils Policy from the OP which was renewed over the years. It is stated that the complainant renewed aforesaid policy for the period 26.08.2011 to 25.08.2012 from the OP. It is alleged that clause VI of the policy specifically insured the complainant against storm, cyclone, typhoon, tempest, hurricane, tornado, flood and inundation resulting in any material damage to the factory building used by the complainant as a garments manufacturing unit to the extent of Rs.2,07,10,000/- (Rupees Two Croes seven Lakh and Ten Thousand only) . The complainant had paid an amount of Rs.32,050/- as the premium for the aforesaid policy. It is stated that for evaluating the risk under the said policy, the officials of OP had visited the factory premises of the complainant on various occasions and thereafter had assessed the premium of Rs.32,050/- which was duly paid by the complainant.
3. It is alleged that while the aforesaid policy was in force and specifically during the intervening night of 5th/06th May, 2012 a localized storm/tempest lashed the town of Manesar where the complainant's factory is situated and caused severe damage to the complainant's factory premises. It is alleged that the impact was so strong that the central dome installed in the factory got severely Page 3 of 12 damaged. There was also damage to the other parts of the premises in terms of broken glass doors and windows and damage to the water channels etc.
4. It is alleged that the complainant informed the officers of the OP on 07.05.2012 about the tempest/storm and intimated the loss. It is alleged that again on 11.05.2012 another localized storm had hit the city of Manesar which caused further damage to the factory of the complainant. The same was also intimated to the OP but no response was given. It is alleged that in response to complainant's letters/email, a letter dated 14.05.2012 requesting for certain documents was received from M/s. S. Soni & Company Surveyor, Loss Assessor and Investigators who had been appointed for assessing the loss.
5. Complainant had also taken quotations for repairs from M/s. Fabcons and they had given the quotation for repair for an amount of Rs.26,66,939.25p. It is alleged that on 15.05.2012 a representative of the surveyor, namely, Mr. Mathew inspected the premises and obtained all necessary documents. Thereafter, there was no response from the OP. On 28.06.2012 an email was received from the surveyor suggesting that the dome was not covered under the policy and certain queries were raised from complainant. The complainant immediately addressed those queries and submitted all Page 4 of 12 the proofs of payment for the construction of the dome made to M/s. Skyarch. However, the OP did not settle the claim. The complainant had also personally met the officers of the OP and was asked to furnish independent proof regarding heavy storm on 05.05.2012. The OP also insisted for on a report of the Metrological Department. The said Department submitted its report on 09.08.2012 by reporting that at palam observatory, the wind speed on 04.05.2012 was 22 kmph and on 05.05.2012 was 54 kmph with no rain or weather phenomenon occurring. It is alleged that inspite of furnishing the requisite documents/report, the OP repudiated the claim vide letter dated 27.08.2012 by relying on the surveyor's report which allegedly stated that the speed of the wind as 54 kmph confirmed in the weather report of Delhi Met. Department could not be the cause of the loss as it was normal wind velocity. Complainant has alleged that decision to repudiate the claim was arbitrary and was not based on any material on record. The complainant has prayed for an amount of Rs.26,66,939.25p towards damage caused to complainant's factory premises under the Standard Fire and Special Peril Policy. Complainant has also prayed interest @18% from 07.05.2012 till realization and Rs.2,00,000/- towards harassment and mental agony.
6. Written statement is filed by OP No.1 and 2 wherein it is admitted that the complainant had taken the policy in question from Page 5 of 12 the OPs having validity from 26.08.2012 to 25.08.2013. It is alleged that claim was assessed and the loss is not covered under the policy. It is alleged that there was normal wind velocity on the day of alleged occurrence. It is further alleged that as per terms and conditions of the policy, OP is not liable to make any payment under the policy in respect of the dome and no deficiency can be attributed to the OPs.
7. Rejoinder is filed by the complainant wherein the averments made in the complaint are reiterated. The proprietor of complainant has filed her own evidence by way of affidavit wherein she has reiterated the contents of the complaint case on oath. She has also stated in her affidavit that surveyors are not competent to determine whether the speed of the wind at 54 kmph could not be the cause of loss or that it is normal wind velocity. The complainant has stated on oath that by no stretch of imagination it can be taken that a wind speed of 54 kmph is 'normal' wind in Delhi. She has also deposed that repudiation of her claim is arbitrary.
8. The OPs did not appear after filing the written statement nor filed evidence by way of affidavit as such were proceeded ex-parte on 05.11.2015.
9. Complainant has filed written arguments. OP was also given opportunity to file written arguments but the same were not filed. However, Ld. counsel for OPs appeared at the time of final arguments. Page 6 of 12
10. We have heard counsel for the parties and have perused the material on record.
11. It is admitted position that the complainant is running a garment manufacturing unit at 139-M, Sector-7, Phase-II, IMT Manesar, Haryana i.e. the factory premises. It is also admitted position that the complainant had from time to time taken Standard Fire and Special Peril Policy from the OP wherein the aforesaid factory building used as garment manufacturing unit of first class construction including wood work and paneling the address of which has been given above is insured with OP against the risk of storm, cyclone, typhoon, tempest, hurricane, flood and inundation in resulting in any material damage to the factory building used by the complainant as a garments manufacturing unit including wood work and paneling. The relevant clause of the terms and conditions of the policy is reproduced hereunder;
"VI. Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation.
Loss, destruction or damage directly cause by storm, Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood or Inundation excluding those resulting from earthquake, volcano eruption or other convulsions of nature (Wherever earthquake cover is given as an "add on cover" the words "excluding those relating from earthquake" shall stand deleted)"Page 7 of 12
12. Complainant has alleged that there was a storm/tempest in the intervening night of 05th/06th May 2012 in the town of Manesar where factory is situated. The same has not been denied by the OP. Plain reading of the cover note of the policy shows that the policy covers the description of the property as shown in Column No.3 of the Cover Note, which reads as under:
"On building used as garments mfg. unit built on first class construction including wood work and paneling situated at 139-M, Sector -7, Phase-II, IMT Manesar, Haryana."
13. OP has repudiated the claim vide letter dated 27.08.2012, which is reproduced as under:
"This is in reference to your above said claim for damages to glass panels. GI gutter, pipes and Dome dt. 05.05.2012. As per survey report of M/s. S. Soni & Co. "The speed of wind as 54 kmph confirmed in the weather report could not be the cause of loss as it is the normal wind velocity. He has also stated that these damages could be due to breakage over a period of time and damages to dome could be due to poor quality/manufacturing defect/technical fault, which are not covered under the policy."
14. OP has not denied that the speed of wind was 54 kmph on the day of occurrence at the place of occurrence. No evidence has been filed by the OP to show that the speed of wind of 54 kmph is a normal wind velocity as is alleged. However, stand of the OP is that it Page 8 of 12 could not have been the cause of loss as it is normal wind velocity. Neither any explanation nor any evidence has been filed by the OP to substantiate its stand taken in the written statement. Burden was on the OP to substantiate that it was normal wind velocity. OP has failed to discharge its burden. The complainant has placed on record the data taken from "World Weather & Climate Information" to show the average wind speeds over the year in Manesar, Gurgaon. As per the said information the average wind speed in the month of May in Manesar is recorded as 12.6 kmph. OP has also not placed on record the surveyor report as on what basis it has been alleged therein that 54 kmph is normal wind speed. It is also not the stand of the OP that surveyor report is based on an expert opinion.
15. On the contrary the complainant has filed on record reporting in Newspaper Indian Express dated 24.05.2016 to show that even a wind speed of 35-45 kmph can cause havoc in a city like Delhi. A perusal of the report of the Indian Express Newspaper dated 24.05.2016 filed by the complainant shows that the dust storm which had hit the national capital region on aforesaid date resulted in death, destruction and chaos. More than 20 flights were diverted and several delayed. Road signage fell on the road killing one person and injuring 2 persons.
Page 9 of 12
16. In written statement also OP has made bald denial without any specific denial. As noted above after filing written statement OP stopped appearing and was proceeded ex-parte. No evidence has been filed by OP to substantiate its defence. In repudiation letter it is also alleged that damage to the dome could be due to poor quality/manufacturing defect/technical fault, which is not covered under policy. However, complainant has categorically stated that for evaluating the risk under the said policy, the officials of OP had visited the factory premises of the complainant on various occasions and thereafter had assessed the premium of Rs.32,050/- which was duly paid by the complainant. No evidence is led by OP to substantiate the alleged ground of repudiation.
17. In United India Insurance Co. Ltd. v. Kiran Combers & Spinners reported as (2007) I Supreme Court Cases 368, it has been held that if insurer has certified that the building was a first class construction, in that even it could not be given benefit of any structural defect not noticed by it. Relevant portion of the judgment is as under:
"Now, coming to the next question of collapse of the building on account of poor construction of column no.3 of the building, there also the submission appears to be not justified. In fact, the Company has certified that this building has a first class construction. Normally when the company insures any factory, then their Officers and the Page 10 of 12 Engineers used to inspect the building to find out whether there is any defect in the construction or the construction is of poor quality. In the present case, the company certified that it is a first class construction, then for some defect which has not been noticed by the company, no benefit could be given to the company for such defect. More so, in the present case, as pointed out that because of defective structure i.e. column No.3, the building has collapsed but the question is what aggravated or accentuated this, factory is in place for more than 12 years & 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. The cause of the damage to the column No.3 of the building was flood water. Therefore, the company cannot escape the liability to compensate the claimant for collapse of the building on account of floods. As a result of above discussion, we are of opinion that the view taken by the National Consumer Disputes Redressal Commission is correct and is fully justified and there is no ground to interfere with the order. As such, the appeal is dismissed. There would be no order as to costs.
18. In the present case, while accepting the premium nothing has been pointed out by the OP towards alleged defect in the construction. OP has failed to adduce any evidence that there was any manufacturing/technical defect in the dome or that it was of poor quality. The complainant had taken the policy from time to time and the policy in question was a renewed policy.
19. In view of the above discussion, we find that there is deficiency in service on the part of the OP. Repudiation of Page 11 of 12 complainant's claim on the ground that none of the insured peril had operated on the date of occurrence is not justified. Accordingly, we allow the present complaint and direct the OP to pay the loss suffered by the complainant i.e. Rs.26,66,939.25P (Rupees Twenty Six Lakh Sixty Six Thousand Nine Hundred Thirty Nine and Twenty Five Paisa only) alongwith interest @9% from the date of repudiation of the claim till payment. Since amount has been ordered to be refunded with interest, no compensation and litigation costs is awarded to the complainant.
20. The complaint stands allowed in aforesaid terms.
21. A copy of this order as per the statutory requirement be forwarded to the parties free of charge. Thereafter the file be consigned to Record Room.
(Justice Veena Birbal) President (Salma Noor) Member Tri Page 12 of 12