National Consumer Disputes Redressal
New India Assurance Company Ltd. vs M/S Raj Tile Works on 4 September, 2009
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL No. 257 OF 2004 (From the Order dated 24.06.2004 in CC No. 160 of 2000 of the Karnataka State Consumer Disputes Redressal Commission, Bangalore) 1. New India Assurance Company Ltd. 2nd Floor, Rama Bhavan Complex Kodialbail, Mangalore - 575003 Appellant Dakshina Kannada 2. New India Assurance Company Ltd. Regional Office I Jeevan Bharati Building Connaught Circus New Delhi 110 001 versus M/s Raj Tile Works Parari, Vamanjoor Mangalore Taluk Respondent Dakshina Kannada BEFORE: HONBLE MR JUSTICE R. C. JAIN PRESIDING MEMBER HONBLE MR ANUPAM DASGUPTA MEMBER For the Appellant Mr. Kishore Rawat, Advocate For the Respondent Mr. D.P. Chaturvedi, Advocate Dated the 4th September, 2009 ORDER
ANUPAM DASGUPTA This appeal challenges the order dated 24.06.2004 of the Karnataka State Consumer Disputes Redressal Commission, Bangalore (in short, the State Commission) in complaint case No. 160 of 2000. In this complaint, after considering the pleadings of the parties and evidence brought on record, including the investigators / surveyors reports, the State Commission passed the following order:
Accordingly, we allow this complaint and direct the respondent/Insurance Co. to pay a sum of Rs.11, 19,716/- with interest at 12% p.a. from the date of filing of complaint till the date of payment. We also award a sum of Rs.3, 000/- as cost of these proceedings to be paid by the respondent to the complainant. We further direct that the order of this Commission should be complied within a period of 2 months from the date of receipt of copy of this order.
2 (i) The case before the State Commission was that the complainant, a proprietorship firm, was running a tile factory constructed in 1960. Over the years, various improvements were effected at the factory. The complainant had obtained an insurance policy (no.11/670802/09038) valid from 12.04.1999 to 11.04.2000 from the opposite party (the New India Assurance Co. Ltd.) appellant before us.
The said policy, renewed upto 11.04.2001, was for Rs.52.60 lakh and covered several perils, including loss on account of accidental Impact by any rail/road vehicle or animal. Among other things, the factory premises included a kiln for firing the raw mud tiles as well as a storage space for drying the raw tiles prior to firing in the kiln. For the kiln, saw dust was used for firing. The storage structure consisted pillars, built of laterite stones, and wooden racks inside along the walls of the structure where the raw tiles were kept for pre-kiln drying.
(ii) At about 3 a.m. in the morning of 18.03.2000, a truck belonging to the complainant came inside the factory premises to unload the sacks of saw dust that it had transported from Kerala and, in the process of reversing in front of the (tile) storage structure, it dashed against one of the laterite stone pillars. As a result of the impact, three compartments of the storage structure collapsed, along with the relevant portion of the roof, wooden racks and the tiles thereon, causing damage to the storage structure as well as the raw tiles.
(iii) The complainant had photographs of the damaged area taken through a professional photographer and also intimated the accident to the opposite party OP (Insurance Company) on 20.03.2000, i.e., the next working day. An investigator (a retired police officer P. Krishna Rao) was appointed by the Insurance Company to inquire into the matter and he visited the factory on 23.03.2000. Before that, the complainant had got an estimate of the loss prepared by a competent valuer (M/s Sampath Associates, Civil Structural Engineers & Valuers) on 22.03.2000 and according to this report, the estimated loss including the damaged building/structure, wooden racks and raw tiles, was Rs.11, 19,760/-. During the visit of the investigator, the complainant furnished various documents like balance sheet, monthly stock record, sketch of the factory premises, insurance policy covering the truck as well as the above-mentioned estimate of loss by the valuer. The complainant also explained that the truck accidentally dashed against the storage structure because it was very early in the morning (about 3 a.m.) and there was no cleaner/attendant with the driver on the truck and the driver had reversed the vehicle on his own. In short, the complainant claimed that this loss was covered under the insurance policy by virtue of the clause of Impact by rail/road vehicle or animal. The claim of the complainant for indemnification by the opposite party was for the amount of loss estimated by the above-mentioned valuer, viz., Rs.11, 19,760/-.
(iv) Instead of settling the claim on the basis of the investigators report and reports of two subsequent surveyors, the OP repudiated the claim by its letter dated 12.09.2000 on the ground that the storage building had collapsed on its own and hence the claim was not tenable. The complainant issued a legal notice to the OP against this repudiation and not being dissatisfied with the latters reply, ultimately filed a complaint claiming compensation of Rs.11, 19,760/-. As already discussed, on consideration of the matter, the State Commission accepted the claim of the complainant and allowed the complaint in toto.
3 We have heard Mr. Kishore Rawat, learned counsel for the OP Insurance Company (which has come up in this appeal) and Mr. D.P. Chaturvedi, learned counsel for the complainant/respondent and have carefully considered their respective submissions as well as the entire set of documents on record.
4. (i) Mr. Rawat emphasised several aspects of inconsistencies in the version of the complainant before the State Commission and drew attention to the following facts recorded by the investigator in his report dated 04.04.2000 and the two surveyors (report dated 21.5.2000 of the first surveyor, M.J. Mallaya and report dated 14.06.2000 of the second surveyor, M.K. Vazhunnavar):
(a) All the three reports independently concluded that the damage to the storage building was not on account of the alleged (accidental) impact of the complainants truck against one of the pillars in the early hours of 18.03.2000.
(b) The area for storage of saw dust for firing the kiln was near the entrance to the factory premises, i.e., up front whereas the tile storage structure, a part of which was damaged, was at the rear of the factory premises, nearly 100 feet away from the former. Therefore, there was no valid reason for the complainants truck, loaded with saw dust bags, to try to unload in front of the laterite stone pillar storage structure in the rear of the factory premises.
(c) The tile storage structure was 30 years old and a class B construction. Hence; natural weakening of the structure over the years was the most obvious cause for the collapse of a part of the structure, causing the reported damage.
(d) As against the claim of Rs.11, 19,760/-, in his detailed report, the first surveyor (M.J. Mallaya) had assessed the loss at Rs.6, 76,948/- by adopting rates which were quite close to the rates and amounts adopted by the valuer on whose estimates the complainants claim was based.
However, the surveyor deducted appropriate amounts on account of depreciation and value of the salvaged material and also applied the reduction factor on account of under insurance, which was quite clear from the table attached to the said surveyors report. Therefore, the loss finally assessed came to Rs.1, 56,626/- after deducting Rs.10, 000/- which, under the terms of the insurance policy, the assured had to bear himself.
(ii) Thus, while reiterating that the repudiation of the claim was justified on account of the independent but unanimous finding of three separate investigators/surveyors (to the effect that the damage to the tile storage structure and the consequent loss could not have been on account of the alleged impact of the truck against one of the pillars of the storage area), Mr. Rawat argued that if at all the claim could have been considered, the amount of indemnification could not exceed the adjusted loss finally assessed by the first surveyor, i.e., Rs.1,56,626/-.
(iii) In conclusion, Mr. Rawat emphasised that the State Commission had thus erred seriously in ignoring the conclusion of the investigator as well as two surveyors and the first surveyors detailed reasoned assessment of loss and instead, accepting the claim of the insured entirely on the basis of the estimate of loss prepared by the complainants valuer.
5. On the other hand, learned counsel for the complainant/respondent argued that the State Commission was justified in coming to the conclusion that the damage to the tile storage area and the consequent loss was entirely on account of the impact of the truck while reversing on the date of the peril and, therefore, the award of the State Commission in its impugned order was also fully justified. Moreover, the opposite party did not disclose to the complainant at any point of time the basis of assessment of loss in the report dated 21.05.2000 of the first surveyor viz., M. J. Mallaya.
6. We have carefully considered the three reports, cited by the OP, which are on record.
(i) From the investigators report, it is clear that after detailed inquiry with all the employees (including the coolies) who were reportedly present inside the factory premises during the night of 17th - 18th March 2000 he observed that none of the coolies, mistry and (temporary) night watchman had actually witnessed the alleged impact of the truck against the storage structure pillar though the coolies had heard a loud noise. He thus came to the conclusion that there was no credible evidence of the pillar of the storage structure collapsing because of any accidental impact with the truck and it might have collapsed by itself due to age.
(ii) In his report dated 21.05.2000, the first surveyor (M.J. Mallaya) recorded the following observations, each of which is, in our considered view quite significant:
It has also been observed from the photographs and the site at which the vehicle is said to have reversed that there is a pavement, almost 5-6 inches high, in front of the pillar at about 10 ft. distance from it. In the normal course of reversing, the vehicle speed is not more than 5 km per hour. At this speed, with the vehicle being heavily laden with saw dust bags, the driver would have known that there is an impediment in reversing as the rear wheel strikes the pavement, even if it were to have been an accident. In view of the vehicle reversing across the diagonal, one set of rear wheels would have had to first climb followed by the other a few seconds later. Any driver, when reversing a vehicle, is normally extra careful. It has been brought to our notice that the cleaner of the vehicle was also not present when the vehicle was being reversed. It is also known from the driver of the vehicle that he has been driving heavy vehicles for nearly five years. In case any obstruction is encountered, he would have definitely sensed it, as additional throttle should have been used to overcome it. In the present case nothing of such nature has been indicated.
There is no reason for the vehicle to have taken the detour during the wee hours also. There is also no proper reasoning as to why the unloading should have been done at night when the unit operates presently in one general shift only.
The copy of the approved building plan has not been enclosed and only the plan made by an architect of building as on date has been provided. We asked for this document to verify whether the building has been constructed to the norms laid down by the concerned authorities or not. In case the structure and or building has no constructions is also to be looked into.
Under the above circumstances, it is opined by me, that the building has collapsed on its own and/or for reasons not covered under the insurance policy held by the insured. The collapse is definitely not due to the vehicle accident as reported The claim for damages to the building and contents are hence not within the purview of the fire policy held by the insured.
(iii) Further, in his report dated 14.06.2000, the second surveyor (M.K. Vazhunnavar) analysed four specific parameters connected with the alleged cause of the peril and came to the following conclusion:
1. During inspection I could physically identify that saw dust godown of the factory is located at front portion of the establishment from road side and not at the rear end as alleged and reported.
2. The vehicles wing panel clamp hook is having a height of 1.75 mtrs. from ground level but the alleged impact damage/sheared off the factory shed pillar occurred above 2.7 mtrs. from ground level.
3. There is a drain trench in front of the alleged hit bomba road pillar which is of 2.7 mtrs. in front of the pillar but over hang of the truck platform from tyre end is only 2.1 mtrs. Therefore, while reversing the truck the driver could have been alerted by trapping the rear wheel tyres into the trench before hitting the pillar.
4. As alleged, due to hitting of the vehicle while reversing at upper deck level of the subjected pillar/shed would have been resulted in reversing reverse momentum at top fixed ridge portion of the pillar and the collapse of the pillar/shed might have been towards front, consequent falling on the subjected vehicle, resulting its own damage, which had not been reported.
Conclusion:
In consideration of the above contradictory parameters the alleged vehicle impact and consequential collapse of the building structure cannot treated as technically feasible.
6. Without considering these specific observations of facts and actual physical situation in their entirety, the State Commission, in its impugned order, came to its own conclusions mainly on the following grounds:
The statement of approval has been recorded by the investigator who has clearly stated that while reversing the vehicle since there was no conductor it hit the pillar post and therefore the damage was caused. The investigator has recorded the statement of number of persons who were familiar with the facts of the accident. The debris were cleared immediately since one of the labourer was found missing. However, on behalf of the Insurance Co. it is submitted that the report dated 14.6.2000 of Vazhunnavar who had visited the spot had opined in his report that there was a trench before the pillar and therefore there was no possibility of the lorry dashing against the pillar while reversing. Evidently, the surveyor had visited the place only on 6.6.2000 nearly after 3 months of the accident. The accident took place on 18.03.2000, which was summer season. When he visited the place it was the rainy season and trenches were dug to allow free flow of water and such trenches were not there on 18.3.2000 in summer season when the accident took place and hence much reliance cannot be placed on the report of the surveyor dated 14.6.2000. The Insurance Co. has also placed reliance on the other 2 reports submitted by Mr. M.J. Mallya, which is marked as Ex.R1 and Mr. P. Krishna Rao, which is marked as Ex.R2. According to the surveyor, Mr. M.J. Mallya, the building of the insured is of 30 years old and the insured had not taken any cover for subsidence and or landslide under the fire policy in question. He has given detailed report regarding the alleged accident as per Ex.R1 and has come to the conclusion that the alleged accident was not due to dashing of the vehicle in question but it has collapsed on its own or for reasons not covered under the insurance policy like landslide. He has also further opined that the building was constructed on loose soil but there was tendency of pillars for sinking. On behalf of the complainant, it is submitted that the said report cannot be believed in view of the fact that there was inordinate delay on the part of surveyor to visit the spot. The factory is situated about a kilometer from the river and the factory is built on rocky soil on the hill side. The surveyor has not dug the soil and he is not an expert to say that on account of the pillar resting on clay and due to unequal settlement of soil the pillar sunk. It was only a conjecture without being having a laboratory test of the soil. Except saying that the collapse may be due to some other reasons, the surveyor Mr. M.J. Mallya has not stated in his report what was the reason for the collapse. The earliest version before the investigator given by all the persons who were familiar with the accident was that the building collapsed on account of the lorry dashing against the pillar while it was being driven reversely (sic). Similarly, the report of the third surveyor namely, P. Krishna Rao, cannot be believed. Though Mallya had visited the spot on 23.3.2000 he has submitted his report only on 21.5.2000 and at every stage he has made some improvement in his version. Apart from the report of the 3 surveyors the Insurance Co. has not placed any material to show that the accident took place on account of the shed collapsing on its own. The materials placed before us to hold that the shed collapsed on its own are not sufficient. On the other hand, the materials placed by the complainant that the portion of the building had collapsed on account of hitting of the lorry to the pillar while reversing are sufficient to hold that the accident has taken place as mentioned by the complainant. Hence, we are of the opinion that the Insurance Co. was not justified in repudiating the claim on the ground that the accident as alleged on 18.3.2000 had taken place on account of the shed collapsing on its own.
7. Even from a bare reading of the report of the investigator (P. Krishna Rao), it is obvious that the State Commission has erred in interpreting the observations of the investigator and coming to the conclusion that according to the said investigator, the damage occurred when the truck hit against a pillar of the tile storage structure while reversing. This is certainly not what the investigator actually concluded. On the contrary, after recording the statements of all employees of the complainants firm who were reportedly inside the factory premises on the night intervening 17th and 18th March 2000, the investigator found that none of them had actually witnessed the collapse of the pillar occurring on account of the alleged impact of the truck while it was being reversed and concluded unambiguously that the pillar had collapsed of its own because of age. Secondly, the State Commission has totally discarded the report of the second surveyor (M.K. Vazhunnavar) on the only ground that the existence of the trench at some distance in front of the storage area was easily explained by the fact that the said surveyor visited the factory premises in June 2000 when the trench had been dug to drain out the monsoon rain water and this was a development much later in time than the date of the peril. All the other observations of this surveyor have been completely ignored. Further, in the same vein, the State Commission has not adverted at all to any of the pointed observations of the first surveyor (M.J. Mallaya) as to why the cause of collapse of the pillar of the storage structure could not have been the alleged impact of the truck. The State Commission has done so merely on the grounds that there was inordinate delay on the part of the surveyor in submitting his report after his actual visit to the factory and that the surveyor had not dug the soil nor was he an expert to claim that the affected pillar collapsed on account of unequal settlement of the soil underneath. Even if the existence of the trench pointed out in the second surveyors report were to be ignored as a development much later than the date of the peril, the large number of observations of the first surveyor reproduced above in extenso, cannot be dismissed without explicit consideration. For example, the reason as to why the truck need not have at all come anywhere near the affected storage structure for unloading the saw dust bags has been explained in detail in the report of the first surveyor (supra) but not addressed at all in the impugned order. Similarly, the fact that there was a 5/6 inches high platform at some distance in front of the storage structure which no prudent driver reversing a truck could not have sensed. Thus, these and many other relevant facts have not at all been discussed in the impugned order of the State Commission. It is also true, as pointed out by Mr. Rawat, that the State Commission has paid no attention to the terms of the insurance policy, which mandated deduction of the value of the salvage and application of under-insurance clause from the amounts of loss claimed in arriving at the net payable claim. In our view, this assessment of the loss, at 1, 56,626/- cannot be faulted even if the best case of the complainant, namely, that the loss was indeed on account of accidental impact of the complainants truck while it was reversing to facilitate unloading of the raw dust bags, were to be accepted at its face value. One of the points highlighted in the impugned order appears to be that apart from the guess based on the age of the structure, neither of the survey reports cites any demonstrated fact or cogent reason for the conclusion that the pillar collapsed on its own. In that context we may notice that it was not for the surveyors or the OP to ascertain the specific cause of collapse of the storage structure pillar. The terms of the policy required that for valid repudiation of the claim, the OP should be able to show before the adjudicating Consumer Forum that, on the basis of preponderance of probabilities, the collapse of the pillar and the consequent loss to the insured was not on account of any accidental impact of a vehicle. It is obvious that the OP has been able to demonstrate this on the basis of the evidence and material on record. In our view, the OP was fully justified in repudiating the claim.
8. In view of the foregoing discussion, we are of the opinion that the impugned order cannot be sustained for lack of proper appreciation of the evidence and material on record. As a result, we allow the appeal and set aside the said order of the State Commission, leaving the parties to bear their own cost. Consequently, the complaint is also dismissed.
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[R. C. JAIN, J] .........................................
[ANUPAM DASGUPTA]