National Consumer Disputes Redressal
Jaiswal Plastic Tubes Limited vs The New India Assurance Company Limited on 12 April, 2010
This appeal challenges the order dated 15 NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL No. 146 of 2005 (From the Order dated 15.03.2005 in Complaint Case no. 332 of 1993 of the West Bengal State Consumer Disputes Redressal Commission, Kolkata) Jaiswal Plastic Tubes Limited 65, G.T. Road (North) Appellant Salkia, Howrah 711 106 versus The New India Assurance Company Limited Howrah Divisional Office Respondent P-18, Dobson Lane, Howrah 711 101 BEFORE: Honble Mr Justice R. C. Jain Presiding Member Honble Mr Anupam Dasgupta Member For the Appellant Mr. S.K. Pattjoshi, Advocate For the Respondent Mr. Sunil Kapoor, Advocate Dated 12th April 2010 ORDER
Anupam Dasgupta This appeal challenges the order dated 15.03.2005 of the West Bengal State Consumer Disputes Redressal Commission, Kolkata (in short, the State Commission) in complaint case no.332 of 1993. By this order, the State Commission dismissed the complaint by holding, inter alia, Taking into consideration the discussion made above we are to hold that the alleged deficiency in service on the part of the Opposite Party Insurance Company while it repudiated the claim of the complainant has not been established by the complainant and hence is not found entitled to get any relief before a Consumer Court.
2 (i) This case has had a truly tortuous course and, for that reason, the facts need to be noted in some detail.
Facts
(ii) The complainant company (hereafter, the complainant) with its registered office in Howrah, West Bengal and polyvinyl chloride (PVC) pipe extrusion factory at Januganj, Balasore, Orissa, obtained an insurance policy from the New India Assurance Company Limited, Howrah (hereafter, the OP) for a total sum of Rs.81,72,342/- for its factory building, plant and machinery, transformer and generator house, etc., against various perils like riots, strike, malicious damage, etc., and renewed the policy from time to time.
(iii) According to the complainant, on 05.03.1989 during the period of validity of the insurance policy - some unauthorised persons allegedly entered the machine room of the factory at about 10:30 p.m. after overpowering the watchman at the factory gate and put some metal pieces in the extruder machine by lifting the vacuum glass cover of the machine while the machine was running at full speed and load. As a result, the twin screws in the extruder machine barrel got jammed and the machine stopped operating. Despite several attempts thereafter the machine did not start. On opening the die head mandrel, the operator noticed some steel pieces embedded in the PVC material under process in the extruder barrel. Apprehending serious damage, the operator informed the officers of the company and left the extruder in the same condition pending further examination.
(iv) The incident was reported to the local Police Station at Remuna on 07.03.1989 and to the Insurance Company through the complainants Howrah Office.
(v) The OP appointed M/s. Mehta & Padamsey Surveyors Pvt. Ltd. (hereafter, M & P) on 16.03.1989 to survey and assess the loss. However, Shri B. Chatterjee, the surveyor from M & P, went to the complainants factory on 30.03.1989. Shri Chatterjee conducted through investigation and had the extruder machine completely dismantled under his supervision. While taking out the twin screws from the barrel of the extruder, he noted, inter alia, that one screw had broken into two pieces and its teeth were damaged at places while the teeth of the other screw had broken at one place; the side surface of the barrel had deep abrasion marks; and the inner surface of the admission tool/mandrel and die bush also had abrasion marks. He also took possession of the metal bits and pieces recovered from the barrel and, on completion of the survey, prepared a Memorandum of the State of Affairs recording the salient points of his findings.
(vi) Thereafter, on 10 & 11.07.1989, Sri Arunachalam, another surveyor from M & P, visited the complainants factory and a representative of the Central Mechanical Engineering Research Institute (CMERI), Durgapur, also came to the factory at the request of the said surveyor. On 25.09.1989, the affected barrel and the twin screws of the extruder were sent to the CMERI in compliance of the request of the surveyor for testing/analysis. The surveyor directly delivered to CMERI the metallic bits & pieces recovered from the barrel of extruder.
(vii) Subsequently the complainant submitted its claim to the surveyors followed by a revised claim amount. By letter dated 15.11.1990, the surveyor informed that the CMERI had completed its investigation and the survey report was being issued to the OP.
(viii) The complainant wrote several letters to the surveyors as well as the OP for copies of the survey report and the CMERIs report and for early settlement of its claim. By letter dated 05.08.1991, the OP informed the complainant that the survey report and the CMERIs test report could not be supplied to it as they were classified documents. However, the OP did not respond to the requests for claim settlement, necessitating further reminders from the complainant.
(ix) By a letter dated 17.08.1992 (i.e., after more than 41 months from the date of the peril), the OP repudiated its liability to indemnify the complainants loss, stating inter alia that no evidence of malicious damage to the twin screws and the barrel of the extruder by introducing foreign materials could be found or detected by the CMERI, which had been engaged to determine the proximate cause of the damage/loss. According to the OP, the surveyors had also endorsed the same view. The OP did not send a copy of either the survey report or the CMERI test report along with the repudiation letter.
(x) On 27.08.1992, i.e., subsequent to the repudiation of complainants claim, Shri R. N. Bhattacharjee, a retired Police Officer appointed by the OP as an investigator, visited the complainants factory and made detailed enquiry with the employees at the factory.
(xi) In reply to complainants letter dated 30.10.1992, by a letter dated 04.11.1992, the Officer-in-Charge, Remuna Police Station informed the Deputy General Manager of the complainant at the Januganj factory inter alia to the following effect:
After thorough investigation, the incident of trespass and mischief causing damage of your Extruder Machine was established as true. The charge sheet no. 105 dt. 30th November, 1990 under section 448/341/427/34 IPC has been submitted against the accused persons and case is now sub judice in the court of the S.D.J.M., Balasore.
(xii) The Complainant continued requesting the OP for copies of the survey report, CMERI test report and Shri Chatterjees investigation report. Finally, by letter dated 14.01.1993, the OP sent to the complainant only a copy of the CMERI test report dated 10.10.1990. The complainant noticed some contradictions in the CMERIs report, which seemed to have overlooked its own findings regarding hardness and chemical composition of the recovered pieces of metal.
(xiii) Though the complainant had received back the barrel and portions of the affected twin screws from the CMERI, it did not receive any of the bits and pieces of foreign material recovered from the extruder. The complainant, therefore, contacted M & P for some of these bits and pieces so that another approved Laboratory of repute could be engaged for a second opinion. However, the M & P claimed that all the bits and pieces of such material had been consumed or destroyed during the tests conducted by the CMERI. Hence the complainant could not get the opportunity to seek the opinion of another qualified laboratory vis a vis the CMERIs findings/conclusions.
(xiv) The complainant, however, referred the CMERIs report to a Senior Metallurgist, Shri S.B. Mukherjee, B.Sc. (Cal.), L.I.M. (London) and to one Shri Probal Kumar Ray, B.E. (Mech.), C. Eng (India), M.I.E. (India), M.I.I.M., M.I.I.F, Member ORSI, Member ASME, F.I.E.E.F.I.V, a Chartered Engineer and Valuer for their separate opinions. Reports of both these consultants (which we would discuss later) disputed the findings of the CMERI.
(xv) On 13.08.1993, the complainant filed a complaint against the OP before the State Commission, praying for an award of Rs.18, 49,910/-, further interest, costs and other reliefs.
(xvi) In its written statement before the State Commission, the OP contended that the loss to the complainants extruder machine was not caused by malicious damage but it was a case of breakdown due to wear and tear of the machine, which was not covered under the policy. The OP also contended that the Mortgagees were necessary parties and the non-joinder of the said necessary parties had vitiated the proceedings. The OP further claimed that it was not concerned with the findings of Shri Chatterjee, the first M & P surveyor, contained in his Memorandum of State of Affairs dated 31.03.1989, though the M & P had been appointed the surveyors, as required under section 64 UM of the Insurance Act, 1938. The OP also claimed not being concerned with the correspondence exchanged between the complainant and M & P. The OP further stated that the complainant had reduced its claim from over Rs.31 lakh to about Rs.18 lakh merely to invoke the jurisdiction of State Commission. Further, the OP disputed the Police report dated 04.11.1992 which, according to it, was a document that was not genuine but had been tampered with and the Police Officer concerned had no business to write such a letter, describing the incident as having been established as true when the matter was sub judice. Finally, the OP claimed that Shri Bhattacharjee was appointed as the Investigator for considering the admissibility of the claim but his report was not available before 17.08.1992 when it repudiated its liability.
(xvii) It would appear that Shri Arunachalam, the surveyor of M & P had submitted his report dated 31.05.1991 to the OP well before the letter of repudiation wherein he had questioned the validity of the case of the complainant on grounds, inter alia, like drafting of the FIR in the complainants Howrah office (to suggest pre-meditation) and the insulation of the heating coil being glass wool (to suggest that the complainant had opened the barrel earlier and also changed the insulation material vis vis that provided by the manufacturer).
Technical Reports 3 (i) The State Commission considered, inter alia, the surveyors report, produced before it by the OP, as well as the reports of the CMERI and the two consultants to whom the complainant had referred the CMERIs report for opinion.
(ii) Because of its importance, we reproduce the CMERIs report dated 10.10.1990 in extenso:
On June 8, 1989, the representative of M/s. Mehta and Padamsey Surveyors Pvt. Ltd., Calcutta visited CMERI and discussed with Dr. B.K. Sinha and Shri P.K. Ghosh regarding the failure problem of the subject lead screw. Further, on June 21, 1989 Shri S. Arunachalam, Director of the above concern came in CMERI for detail discussion regarding the aforesaid problem with Dr. B.K. Sinha, Dr. A. Basu and Shri D.K. Ghosh. During the technical discussion, it was decided that the above work involved in-situ, non-destructive metallography and extended metallurgical and mechanical investigations at CMERI with a view to ascertaining the proximate causes of failure of the said screw.
2. BRIEF HISTPORY OF THE CASE The case history as reported by M/s. M & P Surveyors Pvt. Ltd, is given in Appendix-I *****************************************************************************************************
4. ITEMS PROVIDED FOR INVESTIGATION
i) Two packets (A & B) containing broken steel pieces as shown in photograph numbers 1 and 2.
ii) Unbroken screw and broken screw (both the halves) of the subject machine as shown in photograph number-3.
iii) Barrel of the said machine as shown in photograph number-4.
5. IN-PLANT INSPECTION During on-the-spot study on July 12, 1989 at the aforesaid plant site, the following important features were noted:
i) A few superficial scratches near the tapered end of the internal surface of the barrel were observed (photograph-5).
The observation was made with the aid of hand torch.
ii) There was no sign of abrasion at the internal surface of the barrel in the vicinity of the vacuum glasses through which the assorted sizes and shapes of steel pieces as reported were introduced.
iii) The lead screw had broken at about 76 cm away from the feeding end (upstream) of the screw whereas the opening provided for fixing vacuum glasses (Photograph-6) was nearly 102 cm away from the feeder.
iv) The external surface of broken screw adjacent to the fractured zone was metallographed using transcopy replication technique. The microstructure revealed tempered martensitic structure. The location and the microstructure are shown in photograph nos. 7 and 8.
v) It was noticed that the first stage of the heating elements was different from that of the other stages in respect of the quality of refractory and the material used for spacer between the copper cooling coils.
vi) During the investigation at site it was observed that a person from some external agency was carrying out testing-cum-repairing services to the Auto-Control Panel of the aforesaid machine.
6. VISUAL OBSERVATION AT THE LABORATORY Visual inspection did not reveal any significant markings/damager on the screw thread or on the inner surface of the barrel material (except the scooping marks) caused by any interference of foreign material, i.e., steel pieces reported, to be introduced as subversive action. Steel pieces contained in sealed packets were of assorted sizes and shapes as shown in photograph nos. 1 and 2.
Scooping marks of shining texture as exhibited in the photograph nos. 4, 9 and 10 inside the outlet end of the barrel in both left and right sides were of equal length (300 mm approx.), width (30 mm approx) and curvature (6 mm approx) from the tail end.
7. TEST RESULTS 7.1 Macro-hardness Measurement:
The macro-hardness of the lead screw and the barrel was measured using Poldi hardness Tester. The characteristic average value (of three readings converted into VPN is as follows:-
i) For screw -
275 VPN
ii) For Barrel - 350 VPN The macro-hardness of three steel pieces designated as a0, a1 and b0, b1, b2 selected randomly from the packets A and B was also measured in VPN scale. The average value (of three readings) is as under:-
i) For a0 - 142 VPN
ii) For a1 - 150 VPN
iii) For a2 - 158 VPN
iv) For b0 - 230 VPN
v) For b1 - 157 VPN
vi) For b2 - 163 VPN 7.2 Chemical Analysis The drilled chips from the failed screw were collected and chemically analysed to determine the constituent elements present. The analysed chemical composition is given in Table-I. Table I Analysis of Chemical Composition Element Weight Percentage Carbon 0.37 Silicon 0.30 Manganese 0.54 Chromium 0.40 Molybdenum 0.17 Vanadium 0.10 Copper 0.15 The drilled chips of steel pieces designated as a0, a1 and b0, b1 from packets A and B respectively were also chemically analysed. The observed chemical composition is given in Table-II.
Table II Observed Chemical Composition Identification Weight percentage Remarks C Si Mn Cr Mo Sample a0 0.34 0.48 2.06 0.14 For samples a0 & b0 carbon could not be analysed due to want of sufficient samples.
Sample b0 0.34 0.48 2.06 0.14 Sample a1 0.19 For samples a1 & b1 entire sample was consumed for Carbon analysis. Other elements could not be analysed due to lack of sufficient sample.
Sample b1 0.12 7.3 Optical Microscopic Examination Specimens were judiciously selected, mechanically polished, chemically etched and viewed under New Generation Optical Microscope with a view to examine (sic examining?) the micro-structural characteristics of the subject failed screw and the steel pieces designated as a0, a1 and b0, b1 of the packets A and B respectively.
Photograph No. 11shows the general distribution of non-metallic inclusion content over the material of the screw.
Photograph Nos. 12and 13 exhibit the presence of transverse cracks at the base of the screw propagating towards the centre plane of the screw (core).
Photograph Nos. 14through 17 reveal three different phases of the microstructure at the fracture and near fracture zone from case to core, consisting a thin hard surface coating layer A (of micro-hardness, about 720 VPN) and a thin martensitic peripheral layer B (of micro-hardness about 550 VPN) that extended into the original heat treated structure of fine tempered martensite C (of micro-hardness about 310 VPN).
The photographs also document the presence of profuse transverse cracks initiated exclusively from the extreme edge of the screw, i.e., from the thin, hard surface coating layer. In some locations, hard coating layer is existing (Photograph No. 14 and
15) whereas in some locations, it is not found at all (photograph No. 16 and
17).
Photograph No. 15represents that general microstructure of the screw, consisting of fine tempered martensite.
Photograph No. 19displays the microstructure of the sample a0 from the packet A consisting of tempered martensite.
Photograph No. 20depicts the microstructure of the sample a1 from the packet A revealing ferrite-pearlite micro-constituents.
Photograph No. 21delineates the microstructure of the sample b0 from the packet B. It contains tempered martensite in the matrix of ferrite.
Photograph No. 22illustrates the microstructure of the sample b1 from the packet B. It consists of case structure of ferrite and pearlite micro-constituents.
8. Discussion Reviewing all the available evidence of visual observation site inspection and the experimental investigations, the sequence of failure mechanism may follow the events as under:-
i) There was no sign of abrasion at the internal surface of the barrel, not even at the vicinity of the bore of the vacuum glass through which steel pieces were reported to be introduced. It suggests that the barrel was neither damaged by any interference of steel pieces nor by the interaction with the lead screw.
ii) The screw got fractured at the point well ahead of upstream of the opening provided for vacuum glass. The screw providing (sic provided?) the forward drive for the flow of PVC with the downstream.
Hence, the steel pieces were supposed to move forward with the downstream of the flow of the PVC and could become the cause of breakage of the screw after jamming at any location of downstream of the vacuum glass, instead of interacting ahead of vacuum glass leading to the breakage. Thus, the reason for the breakage of the screw due to introduction of foreign materials, i.e., steel pieces is not tenable and this conjecture introduced is ruled out.
iii) Presence of symmetrical scooping marks of shining texture in the barrel even after the lapse of about six months from the occurrence of failure was unusual. This shining texture should have diminished in the period of six months from the date of occurrence due to weathering effect.
iv) Scooping marks of equal dimensions such as length, width and curvature in the internal side of the barrel both right and left sides were unrealistic of any accidental failure. Had there been any interference in the barrel-screw system due to presence of any foreign materials, that interference of disturbance should not have been transmitted equally and uniformly causing symmetrical scooping marks on both right and left hand sides (internal surface) of the barrel and that too at equal distance from the tail end.
v) Macro-hardness survey revealed that the mean hardness of the barrel is in the higher side than the mean hardness of the screw. Hence, it is established that a material of lower hardness cannot make scratches over a material of higher hardness without any evidence of rub on the component of lower hardness.
vi) Chemical composition, hardness value and also the micro-structure of the supplied specimen of steel pieces selected randomly from the packets A and B did not confirm that all of the pieces were foreign materials. Rather out of four, two of them were very close to the screw material in respect of chemical composition, hardness and microstructure.
The documented microstructure revealed that all the cracks were transverse and initiated at the base of the screw where a thin hard surface coating and a thin martensitic peripheral layer were present. Surrounding areas of some of the cracks were not decarburised and others were carburised. This suggests that the cracks might have developed either during heat treatment or at the time of surface treatment.
The high hardness at the extreme edge of the screw due to presence of hard surface coating and martensitic peripheral layer had developed residual stresses and contributed to fracture of this screw.
9. CONCLUSION
i) The evidence gathered on the subject failure reveals that the breakage cannot be attributed to any jamming caused by foreign material. This is confirmed from the scratch less surface condition of both barrel and the screw.
ii) The hard surface coating over the lead screw was uneven with erosion at places. Micro-cracks had developed as per the micro-structural examination as already discussed. Under these conditions, any overloading or improper heating of PVC material could lead to failure of lead screw in torsion or shear mode. In this context, more information is required about the past history of heating elements.
iii) From the presence of micro-cracks of the threads of the subject screw, it can be concluded that stress raisers had developed right from the manufacturing stage of the components. In this context, it is recommended that quality of installed machinery must be assured beforehand in all respect. No such certificate was furnished for study. Hence, it cannot be established whether these cracks had developed during heat treatment or during hard surface coating.
(iii) As against this, the relevant observations in the report of the Senior Metallurgist, Shri S.B. Mukherjee were as under:
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx The purpose of the comments herein are solely to highlight the palpable inconsistencies, errors and illogicalities noted between the test results and the conclusion drawn therefrom.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx It was not controverted by the CMERI investigators that the steel bits introduced were found embedded inside the semi-plastic mass inside the dismantled barrel and that they were of lower hardness than the rotary screws and the inner surface of the extruder chamber. For, all three latter members were necessarily nitrided and hardened to Vickers Pyramid Number 275 and 350 respectively as against the hardness range of the bits found within Vickers Pyramid Number 157 to 242 max. The obvious and logical conclusion from the foregoing test results should have been that no scratch mark would result by abrasion of the softer steel bits on the much harder nitrided surface of cylinder and the rotary screw, if at all.
Recalling here that the clearance between the conical rotary screws and the extruder chamber was of the order of only 0.25 mm and that the entire chamber was full of the hot plastic (viscous) mass at the time of failure, any of extraneous bits introduced inside the running chamber (through the sight hole) would instantly jam the screws not allowing the introduced bits to travel any distance towards the exit end but foul the rotating screws. Again the logical finding should have been that the effect of the bits introduced would only be to brake or stop instantly the rotary motion of the screws while the full torque was in force at the driving end via the geared motor. Failure had to result for the palpable reason that the constantly applied torque was being opposed by an opposing braking force equal to or greater in magnitude from that of the applied torque. Under such set of circumstances the next query that comes in mind was where the rupture by shear would logically occur?
The logical answer should be that the screw should rupture at any point between the point of introduction of the steel bits and the thrust bearing support at the charging end and not at any point beyond the point of introduction towards the exit end as erroneously supposed by the authors of the Investigation Report of the CMERI.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx One can visualise now the correct mode of failure by rupture of the subject shaft:
With the extruder machine smoothly delivering long lengths of tubes through the exit end just prior to the failure, the screw shafts could be assumed to be faultlessly operating duly meshed mixing kneading and pushing forward the hot plastic mixture notwithstanding the prior presence of stress raising points of hair line cracks on the same.
No sooner had the rotary motion of the screws been arrested suddenly by the fouling steel bits the applied torque from the driving motor came to be opposed by an opposing torque acting on the screw shaft acting on all points located between the extraneous bits close to on around the introduction point and the thrust bearing, the sole support of the rotary screws.
As to the final question where and at which point then the rupture by shear should and could take place the answer is already there in the metallographs enclosed with the Investigation Report by the CMERI; vide photographs No. 11, 12 & 13 revealing the prior presence of non-metallic inclusion and transverse cracks propagating towards the centre plane (core) of the screw (core) shaft.
In short, the answer of conclusion therefore should be: the screw ruptured at and along one of the stress concentration points and planes that already existed as supported by the metallographs enclosed.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Obviously the shiny and symmetrical scoop marks could not nor did result from any abrasive action of the foreign bits introduced subversively. It is plainly illogical to aver that any softer steel bits than the barrel could or did in fact leave such scoop mark. Reasons therefor should therefore have been sought elsewhere.
An immediate explanation that comes to an open mind is that the symmetrical scoop marks may have been the consequences of pinching and/or gripping efforts made during dismantling of the barrel and the screws or merely the tell-tale marks left by the crow bars of the maintenance crews engaged in cleaning and/or pinching the barrel with a view to lift (sic lifting?) the same clear and free of the screw shafts.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx The (metallographs) Nos. 18, 19, 20, 21 and 22 elucidate and explain a good many points:
That the general or core constituents of the steel screw are tempered Martensite and ferrite and that the constituents of the foreign bits of steel are ferrite pearlite mixture.
That the bits contained packet A were broken or spalled bits from sheared screw shaft as the same got fouled and jammed to impact shock and rupture and that the bits in sample (packet) b0 and b1, were in reality the introduced foreign steel bits.
The logical conclusion from point (i) and (ii) gleaned from metallographs 18 to 22 (inclusive of both) should accordingly be that the bits tested and studied were chipped off from either or both screws and extraneous bits respectively as was natural in the sequence of events leading to and following the failure of the screw under investigation.
Conclusion:
(a) The screw shaftings inside the Extruder machine under investigation were severely damaged with one rupturing in two when they were in full operation and load due to the sudden and violent jamming of the screw helix by the presence of introduced steel bits.
(b) The failure of the screws was palpably caused by the tremendous opposing-braking force coming to play against the applied torque of the driving Motor at one end.
(c) The rupture of the screw occurred as it should, along the pre-existing hair line cracks or stress-raising points and planes the same as established by the macrographs taken of the same.
(iv) Finally, Shri Probal Kumar Ray, the Chartered Engineer opined as under:
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx These occurrences clearly suggest that the screws got jammed due to the interference of some foreign steel pieces. The analysis of chemical composition of various samples taken by CMERI confirms the presence of the foreign steel materials inside the barrel. The gap between the screws is very small, as stated earlier, and if any foreign materials are inserted, the screws will definitely get jammed, thereby resulting in either tripping of motor circuit or failing which the screw will break at its weakest place and not at the point of jamming. The normal tendency will be that the twisting force from the motor will cause breakage at a point nearest to the motor.
The micro structure analysis revealed the cracks in the screw were of transverse nature and initiated at the base of the screw and surely these were the weakest area of screw and so when got jammed the same was broken at that point. Mere presence of such transverse cracks cannot lead to the conclusion that no foreign material were responsible for the breakage of the screw; on the contrary, all the other evidences suggest that the breakage of screw attributes to jamming of the screw at some point by some foreign steel parts placed through the inspection glass.
The conclusions drawn in the report of the CMERI, do not conform with the test results/observations made by them. The reasons of failure of the screw were not clear from the report and it is rather found to be an attempt to arrive at a preconceived conclusion the subject failure could not have or did not take place due to the introduction of some foreign steel pieces by one or more saboteurs.
The steel pieces, having lower hardness than the screw material, could not make any scratch marks on the screw. The extraneous steel bits introduced inside the running chamber would instantly jam the screws not allowing the introduced bits to travel any distance towards the exit and but foul with the rotating (in opposite direction) screws, thereby resulting in brake or stop instantly the rotary motions of the screws while the full torque was in force at the driving ends of the screws via geared motor. The constantly applied torque was being opposed by an opposing breaking force equal to or greater in magnitude from that of the applied torque.
It can logically be inferred that the screw will break at any point between the point of introduction of the steel bits and the bearing supports at the charging end and not any point beyond the point of introduction towards the exit and as erroneously stated in the report of the CMERI.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Conclusion:
The screw broke due to sudden jamming of the same while it was on full load. The presence of these steel bite inside the barrel enclosing the screws confirms that the jamming occurred by means of those foreign steel bite; the screw failed at and along one of the weakest and stress concentration points and planes, that already ..as supported by the metallographic tests.
First Order of State Commission
4. On consideration of these reports, the State Commission concluded in its order dated 26.05.1995 (which was corrected by way of adding the pages left out inadvertently during typing, under the State Commissions order dated 28.06.1995) as under:
(a) The macro-hardness test conducted by CMERI shows that the macro-hardness of the screws is 275 VPN, the macro-hardness of the barrel is 350 VPN whereas the macro-hardness of the small bits/pieces varies from 157 VPN to 242 VPN only.
Hence it is evident that the small bits/pieces are not the part of the screws or barrel.
(b) There was no breakage/chipping of the barrel. Since only the screws have broken, the CMERI made chemical composition analysis of the metal of screws and the metal of the small bits/pieces. From the results of chemical analysis it is evident that the small bits/pieces are not the part of screws.
(c) The conclusion arrived at by the CMERI is not in consistence with the test results.
First Order of National Commission
5. The OP came up in appeal before this Commission. In the operative part of its order dated 07.01.1997, this Commission observed and directed as under:
We have carefully gone through the records and heard the counsel on both sides. The crucial question is whether malicious damage was caused to the machinery by introduction of foreign material into the extruder. There are two issues here: (i) whether the incident took place and (ii) whether technically it could be established that the damage was due to the introduction of foreign material in the machinery. Regarding the first, there is a report from the concerned police station. As for the second, the conclusion of CMERI on its technical tests relied upon by the Appellant Insurance Company are contradicted by the two consultants of the Respondent Complainant which in turn has been rebutted by the CMERI. Since that basic material which formed the basis for tests/analysis was reportedly consumed / destroyed during the testing conducted by the CMERI, what remains is only the test results and conclusions thereon by the CMERI and the contrary opinions of the two consultants of the complainant on the CMERI Report and the CMERIs rebuttal. The State Commission have discussed these technical opinions, set aside the CMERI report and accepted the views of the consultants. Although the CMERI was not appointed by the State Commission and cannot, therefore, be said to be covered under the provisions of CPA, it would still be necessary to have an independent technical evaluation of the conflicting opinions/conclusions before a view is taken on the report of the CMERI vis--vis the view of the two consultants. In the light of the aforesaid, we remand the case to the State Commission for de novo adjudication by getting a technical evaluation of the reports/opinions through an expert metallurgical organisation and allowing the parties a further opportunity to adduce evidence if they so desire. The appeal is disposed of as above with no order as to costs.
First Remanded Proceedings, RITES Report and Second Order of State Commission
6 (i) In the remanded proceedings, the State Commission, at the suggestion of the complainant which was not opposed by the OP, referred the technical questions (arising from the contrary opinions of the CMERI and the two consultants) to the Rail India Technical and Economic Services Limited (RITES).
(ii) The RITES report stated as under:
The Technical evaluation and reports on the above case have been studied and the comments of this office are as under:
There was presence of micro-cracks on the threads of the screw as revealed in the metallographic examination of CMERI and accepted by other examinees, viz., Sri S.B. Mukherjee and Sri Probal Kumar Roy. These cracks clearly indicate the stress-raising point and weakest link in the screw. However, going by all the facts of the case, it is seen that the working of the machine was tampered. This has resulted in inclusion of foreign materials into the extrusion system. The hardness of the particles introduced being lower than the hardness of the barrel, as opined by the CMERI, there was no sign of crack on the surface by the foreign particles. However, the increase of the foreign materials definitely resulted in introduction of unwanted tensile force in the whole extrusion system thereby loading the threads of the screw. The screw which already got micro-cracks actually failed on this extra loading.
In conclusion, it may be indicated that external tampering of the machine by miscreants led to a situation where screws which were already having micro-cracks gave away. Had there been no external tampering, it is quite possible that the machine would have been working for quite some time thereafter.
A copy of the investigation reports to back up this finding by Metallurgical Experts (Dr. S.C. Dasgupta and Dr. T.K. Paul) is attached herewith.
Report No.SR-0641/97 Date :
20/8/97 Page : 1 of 2
1. Applicant :
The General Manager (Inspection) RITES F-2/2, Gillander House, 8, N.S. Road, Calcutta 700 001.
2. Their Reference :
No. RITES /ER/JP dt.
05/08/1997
3. Subject :
Technical evaluation of reports / opinions related to court case between Appellants M/s. Jaiswal Plastic Tubes Ltd. and Respondents M/s. The New India Assurance Co. Ltd., S.C. Case No. 332/O/1992 dt. 24/6/97.
4. Scope :
Studying and technical evaluation of the following reports and to submit independent comment on the basis of the said reports.
1. M/s. C.M.E.R.I., Durgapur, report no.
R&FA/M.Sc./TR-24/90 dt. 10/10/90 (total number of pages 20)
2. Report of M/s. S.B. Mukherjee dt. 17/3/93 (total no. of pages - 7)
3. Report of Sri Prabal Kr. Roy (report No. Nil, Dt. Nil, comprising of 5 pages).
4. Further comments of C.M.E.R.I. Durgapur vide their letter no. R&FA/BKS/93 dt. 2/12/93 on their earlier report referred above (3 pages including the covering letter).
5. Study conducted / comments by :
Dr. S.C. Dasgupta, B.Sc. (Hons.), B.E. (Met.), M.S. (USA), Ph.D. (USA) Dr. T.K. Paul, M. Tech (Metallurgy), Ph.D (IIT), Kharagpur.
The presence of micro-cracks of the threads of the screw as revealed by metallographic examination clearly indicates the stress-raising point and weakest link in the screw. It is worth mentioning that all the three reports expressed the same view. However, the presence of crack in the screw does not mean that if would fail immediately. Until the crack grows and reaches a critical size, catastrophic failure cannot take place. Now the question arises how the existing crack propagated and reached to the critical size before it failed. At this juncture, two different opinions were expressed: one by C.M.E.R.I. Durgapur, who considered that residual stresses contributed to fracture of the screw and, on the other hand, both Mr. S.B. Mukherjee and Mr. Prabal Kumar Roy concluded that the failure of the screw has been caused by sudden jamming due to the presence of introduced steel bits.
In this regard, the presence of foreign material was concluded by C.M.E.R.I., Durgapur, through various investigations (metallographic examination, hardness and chemical analysis). The evaluation report/opinion submitted by the other two Consultants also supported the presence of foreign particles. It was also commented by C.M.E.R.I. that the hardness of the particles being lower than the hardness of the barrel (350 VPN), there should not be any possibility of barrel surface being scratched by the foreign particles.
In our opinion, the failure of the screw took place due to the existence of micro-cracks and presence of residual stresses as reported by C.M.E.R.I. Introduction of foreign materials might have helped the jamming of the operation vis--vis some contribution in augmenting further development of the crack. But we are of the opinion that had not there been any micro-crack on this screw as well as presence of residual stresses, the incident could not have happened only by introduction of foreign materials.
The above comment is based on the available Technical Evaluation Report / Comment as indicated above (Clause No. 4) and exercising our knowledge and experience. This report is issued without prejudice. [Emphasis supplied]
(iii) Based on the RITES report as well as the preceding three technical reports, the State Commission, by its order dated 12.12.1997, observed and directed as under:
The conclusion of the R.I.T.E.S. is that the external tampering of the machine by miscreants led to a situation where screws which were already having micro-cracks give away. It has been opined that had there have been no external tampering; it is quite possible that the machine would have been working for quite some time thereafter.
As discussed in the main judgement, the contention of the O.P. is that the loss was not caused by malicious damage, but that it was a case of wear and tear, which was not covered under the Policy. We have compared the earlier opinions submitted before the Commission and also the evaluation of the opinion on further tests by the R.I.T.E.S. The conclusion of the R.I.T.E.S. is based on sound test and we are inclined to accept the same. An objection has, however, been raised by the opposite party stating that the said opinion is not conclusive and that further evidence was necessary to rebut it. After giving our anxious consideration to the dispute focussed before us, we are inclined to accept the opinion of the R.I.T.E.S. and we do not think that any further evidence on this point would be necessary. Accordingly, we have got accepted the suggestion of the O.P. The National Commission has ordered to hear the case de-novo after making a fresh technical evaluation of the conflicting opinions as suggested in the remand order. We have accepted the opinion of the R.I.T.E.S. as discussed above. The complainant is, therefore, entitled to compensation.
As regards the compensation the Commission has already awarded a compensation of Rs.10, 28,505/- as prayed for by the complainant with an interest @18% with effect from the 5th June, 1989. We confirm the said award. We, however, reduce the amount of compensation from Rs.50, 000/- (Rupees Fifty thousand only) to Rs.25,000/- (Rupees Twenty Five thousand only) which according to us, shall serve the ends of justice. We also award a cost of Rs.5,000/- (Rupees Five thousand only) as awarded earlier. The amount already paid by the O.P. as per National Commissions order shall be adjusted against the aforesaid amount.
Second Order of National Commission
7. Against this order, the OP again came up in appeal. This Commission disposed of the appeal by its order dated 17.02.2000 in the following terms:
There are many grievances raised by the Appellant against the impugned order passed by the State Commission. We shall not investigate the details. But we think in the facts and circumstances of the case the order passed by the State Commission has to be set aside and remanded back to the State Commission to pass a fresh order in the light of the directions given by this Commission in its order dated 7th January, 1997. In that order, it was inter alia directed:
The State Commission have discussed these technical opinions, set aside the CMERI report, and accepted the views of the consultants. Although the CMERI was not appointed by the State Commission and cannot therefore be said to be covered under the provisions of CPA, it would still be necessary to have an independent technical evaluation of the conflicting opinions / conclusions before a view is taken on the report of the CMERI vis vis the views of the two consultants. In the light of the aforesaid, we remand the case to the State Commission for de novo adjudication by getting a technical evaluation of the reports / opinions through an expert metallurgical organisation and allowing the parties a further opportunity to adduce evidence if they so desire.
These directions must be carried out by the State Commission and it must pass an order conformably with the direction given by this Commission after giving opportunity to both sides to produce evidence and documents in support of their contentions. The case is remanded back to the State Commission. The State Commission will dispose of this case as expeditiously as possible. The amount paid by the New India Assurance Company Ltd. to the Respondent, M/s. Jaiswal Plastic Tubes Ltd., will abide by the result of the decision given by the State Commission. The First Appeal is disposed of as above.
Second Remanded Proceedings, NML Report and Third Order of State Commission
8. This time the State Commission sought the opinion of the National Metallurgical Laboratory (NML), Jamshedpur by forwarding all the four reports on hand and quoting the operative part of this Commissions order dated 07.01.1997.
9. By his letter dated 16.05.2001, the Deputy Director and Head, Materials Characterisation Division, NML reported as under:
Our comments are as follows:
The National Commission has rightly framed two important issues:
(i) Whether the incident took place, and (ii) Whether technically it could be established that the damage was due to introduction of foreign materials.
On the issue, whether the incident took place To come to a firm and irrefutable conclusion (or at least beyond reasonable doubt) on an issue like this, several actions are needed. They are:
(1) Photographic documentation for physical evidence (2) Record of systematic enquiries by the Police or an investigation agency. The investigation should include among others, inspection of the operation and maintenance record, cross examination of the plant personnel and recording their statement. (3) If an outsider was caught at the time or after the incident took place, recording the circumstances under which they were caught, and the records of their statements, etc. In a nutshell, what is needed is to have a complete and a thorough investigation. May be, it was done, but it appears that the National Commission has not been satisfied. From all the papers made available to NML, it is not possible for us also to come to a conclusion beyond reasonable doubt that indeed, the incident took place by the handiwork of a few outside miscreants who (as alleged) introduced some foreign materials in the extruder. And before this alleged incident, the plant was running very well.
On the issue whether technically it could be established that the damage was due to introduction of foreign materials Yes, could have been possible. First, it was needed to establish that there was no malfunctioning of the plant before the alleged incident took place. Secondly, it was to be firmly established that the introduction of the foreign materials preceded the occurrence of the breakage of the screw. If it was established that there was no malfunctioning of the plant earlier to the alleged incident and indeed, the foreign materials were introduced before the incident took place, then in the third step, it was needed to establish that the introduction of the foreign materials was the sole reason (or at least the primary reason) for the breakage of the screw.
The investigation of CMERI should have included the examination of the fracture surface by scanning electron microscopy. It is possible that this was not considered by them, since they did not have the equipment [but the help of another organization could have been taken by them]. It is also possible that they did not consider the technique, since when they received the failed pieces, many months had passed and the fracture surface was rusted. But no mention of this technique in their report means that its need did not occur to them. If fractography by scanning electron microscopy was used on a reasonably clean (un-rusted) fracture surface, then it is quite possible that one of the following three points could have been established.
(i) Whether the fracture surface consisted only of features that showed slow progress of the crack surface. Then, it could have been established that the failure of the screw preceded the introduction of the foreign materials.
(ii) Whether the fracture surface consisted of two parts. One, having features showing slow progress of the crack surface. Second, having features showing rapid progress of crack surface. Then, it could have been established that the crack was progressing in any case, and now the failure was hastened because of the jamming by the foreign materials.
(iii) Whether the fracture surface consisted of features showing only very rapid progress of crack surface. In this case, it could have been established that the jamming by the foreign materials was the only cause of the fracture of the screw.
Conclusions by NML:
NML concluded that the whole investigation has been done in rather inappropriate manner. Both the complainant and the opposite party have some responsibility for this. Compared to the way such investigations are carried out in a country like USA, the present one has been rather amateurish.
We feel that the case should be closed as it stands now. Nothing tangible can be established at this stage. There are many loose ends.
10. On consideration of the report of the NML, the State Commission, however, passed the impugned order dated 15.03.2005 (paragraph 1 above) dismissing the complaint this time, after having allowed it twice earlier.
11. Hence, the complainant has come up before us in this appeal.
Two Important Documents
12. Before proceeding further with consideration of the appeal, we need to notice some relevant parts of two more documents on record.
(i) The first is the surveyors report dated 31.05.1991. The relevant paragraphs are as under:
The scientists carried out their investigation and have concluded that cracks were found at the base of the screw indicating defect in the heat treatment by the manufacturers. The scientists have also categorically stated that there was no evidence attributable to introduction of the foreign materials as alleged by the insured. We give below the verbatim reproduction of the discussions and conclusions contained in their report No. SC/TR-24/90 dated 10th October 1990.
[Note: The foregoing observations of the Surveyor were followed by a reproduction of the CMERIs report detailing the Discussion and Conclusions that we have already noted in paragraph 3 (ii) above.]
23. The above conclusively established that the damage to extruder was attributable to breakdown a peril not provided the fire policy under which the insured raised their claim.
24. On receipt of the report of CMERI by our letter no. C/487/454 dated November 15th 1990, we informed Jaiswal Plastic Limited that the damage claimed by them was not attributable to any of the insured peril under the Policy. The insured had confirmed receipt of our letter and also confirmed acceptance of the findings of CMERI by their letter 23/4/91.
This report is issued without prejudice to the rights of anyone concerned and subject to the terms and condition of the policy.
[Emphasis supplied]
(ii) The second document is the report dated 31.08.1992 of the Investigator, Shri R.N. Bhattacharjee appointed by the OP, submitted to OPs Senior Divisional Manager, Howrah. This is reproduced in full:
At the first instance, I had been to the Factory of Jaiswal Plastic Tubes Ltd. situated at Januganj, Balasore, Orissa on 27.08.92 to find out the particulars of the police case and its particulars in connection with the incident which happened on 5.3.89 (night). I saw Mr. D.C. Pandey, Dy. General Manager Jaiswal Plastic Tubes Ltd. and came to know from him that on 5.3.89 at about 10:30 P.M. 5/6 miscreants entered inside the factory premises forcibly by manhandling the Darwan namely Shyam Sundar Pandey and causing mischief to the main machine by tampering the same which as reported to this incident (sic) was in working condition.
The incident was reported to the local Police Station (Remuna Police Station) by Mr. D.C. Pandey by a letter of complaint dt. 7.3.89 and officer in charge Remuna Police Station started a case vide Remuna Police Station Case No. 21(1)/89 dt. 7.03.89 under section 448/427/323/34 I.P.C. treating the said letter of complaint as F.I.R. of the case against 5/7 miscreants, and took up investigation of the P.S. S.R.K.M. Das, Officer in charge, Remuna Police Station investigated the case.
I then came to Remuna Police Station and saw Sri Narain Mahanti, S.I. holding the charge of P.S. and discussed with him about the above case. He after going through the records reported to me that the previous officer-in-charge (S.I., M.N. Das) after investigation of the above case submitted the final report before the learned Sub-Divisional Judicial Magistrate, Balasore Court. But the matter was moved by the complaint through his lawyer before the Learned S.D.J.M., Balasore Court being not satisfied of the report submitted by the then officer-in-charge Remuna Police Station as to its final report. The Learned Court was then pleased to order to investigate into the matter again and directed officer-in-charge Remuna Police Station for re-investigation. Accordingly, officer-in-charge Remuna Police Station (S.I., D. Dhar who was then holding the charge of the Police Station) re-investigated the case and after due investigation submitted charge sheet vide charge sheet No. 105 dated 30.11.90 under section 448/341/427/34 IPC against the following accused persons whose names were transpired during the investigation as the main miscreants of the incident:
1.
Suren Murma (27) son of Memni Murma
2. Bhaskar Jana (27) son of Purustham Jana
3. Rabindra Kumar Bhuniya Alias Rabi Singh (28) None of the above accused persons could be arrested by the Remuna Police as they all e absconded soon after this incident. Process, i.e., warrant of arrests were prayed for before the Learned Court (S.D.J. M., Balasore) and accordingly warrants of arrest were issued against all the above named accused persons by the Learned Court.
I also had been to the court of the learned S.D.J.M., Balasore and gone through the court records. It could be found from the Court records that charge sheets against the accused persons have been received by the Learned Court on 4.12.90 and warrants of arrest were also issued thereafter. The next date of the case has been fixed on 5.9.92 for execution and return of the warrants of arrest issued against the accused persons.
On 28.8.92 I again had been to the Learned Court of S.D.J.M., Balasore and could be able to collect the Police reports, viz., F.I.R. of Remuna Police Station Case No. 21(1)/89 dt. 7.03.89 under section 448/427/323/34 IPC and charge sheet No. 105 dt. 30.11.90 (both Xerox copies) which are enclosed within the report.
I also made some discreet enquiries about the present whereabouts of the accused persons within the locality and also contacted few local people. They reported to me that the above named accused persons previously used to work under contractor in the Jaiswal Plastic Tube Ltd. But they all left the place soon after the incident and their present whereabouts could not be ascertained. I also questioned Mr. D.C. Pandey Dy. General Manager, Jaiswal Plastic Tubes Ltd. over this case who also admitted this before me and reported that the accused persons were under the capacity of the contractor and on purely temporary basis. As the accused persons were retrenched from jobs, they have taken this revenge by causing mischief to the main machine (Extruder Machine). [Emphasis supplied]
13. We have heard Mr. Sukumar Pattjoshi, learned counsel on behalf of the appellant/complainant and Mr. Sunil Kapoor, learned counsel on behalf of the OP/Insurance Company and carefully considered all the relevant documents.
Arguments of Parties
14. Mr. Pattjoshi has argued mainly as under:
(i) First, the attempt of the OP to altogether disregard the incident of miscreants entering the factory premises late at night on 05.03.1989 and tampering with the extruder machine by inserting pieces of steel was not based on tenable grounds. The matter was duly reported to the local Police Station as early as possible and according to the letter dated 30.10.1992 (para. 2 (xi) supra) of the Officer-in-Charge of the Remuna Police Station, it was found to be a true incident. The OP had produced no evidence in support of its claim that this letter was not a genuine document. Further, even if, for the sake of argument, this letter was to be disregarded, the fact remained that the occurrence of the incident, as reported to the Police by the complainant, was borne out in totality by the report dated 31.08.1992 of the OPs own Investigator, Shri R. N. Bhattacharjee whose report was not even produced before the State Commission when the complaint was first adjudicated by that Commission. In fact, the OPs letter of 17.08.1992 repudiating the claim was issued without waiting for the Investigators report. The OPs contention that the report dated 30.10.1992 of the Officer-in-Charge, Remuna Police Station was a document that had been tampered with was thus completely demolished by the report of the OPs own Investigator.
(ii) Secondly, the CMERIs conclusions in its report of 10.10.1990 conflicted with its own factual observations, as amply demonstrated by the reports of the two experts whose opinions were sought by the complainant. The views of these two experts, one of whom (Shri S. B. Mukherjee, was a highly qualified Metallurgist), unanimously demonstrated, after sound technical review of the CMERIs own findings based on various analytical tests conducted by it, that the discussion of the events leading to the failure of the screws and the conclusions of the CMERI based on the said discussion were prima facie erroneous. Moreover, the opinion of RITES (a Central Government organisation), which too was based on the reports of two qualified Metallurgists, showed that though hairline cracks might have developed at the (feeder end) base of the fractured screw, what precipitated the fracture of the screw was not wear and tear due to the regular usage but the fact that foreign elements, viz., pieces of steel had been introduced into the barrel by miscreants.
(iii) Thirdly, in passing the second remand order dated 17.02.2000 the National Commission erred in not noticing the report of RITES (based on the technical opinion of two qualified Metallurgists) and insisting that the matter be again referred for examination of the technical opinions already on record by an expert metallurgical organisation.
(iv) As it happened, the report of the National Metallurgical Laboratory (NML), the expert metallurgical organisation to which a reference was finally made by the State Commission, turned out to be the most equivocal of all the technical reports on the specific technical questions but eloquent on issues on which the said NML had no business to comment, e.g., the mode of investigation into the incident leading to the damage. A plain reading of this report would show even to a lay reader that the report, after pointing out the better methods of investigation/analysis that the CMERI could have adopted, simply listed the three possible causes of failure of the screw of the extruder without expressing a firm opinion and ended up recommending that the case should be closed. It was, therefore, erroneous on the part of the State Commission to rely on this report of NML and hold in its impugned order that the complainant had not been able to establish deficiency on the part of the OP in repudiating its insurance claim.
(v) From the evidence, documents and technical reports on record, it was clear that (a) the mischief of malicious damage to the extruder machine by inserting steel/metal pieces was committed by some disgruntled temporary workers earlier engaged at the factory and then discontinued by a contractor appointed by the complainant, (b) the overwhelming technical view was that the fracture of the screw of the extruder machine was caused by these steel pieces and not by wear and tear (and, even if it was assumed that the fractured screw had developed some hairline cracks at the base because of residual stress factors, the breakage was precipitated by this malicious act), (c) the peril was thus squarely covered by the terms of the insurance policy and (d) the OP committed deficiency in service by repudiating the complainants claim for indemnification of the loss.
15. On the other hand, Mr. Kapoor seeks to rely primarily on the report of the CMERI in respect of the cause of failure/fracture of the extruder screw and the report of the surveyor based thereon. He has highlighted the rejoinder of the CMERI to the views of the experts whose opinions were obtained by the complainant, in which the CMERI claimed that it stood by its opinion. Without emphasising the NML report in its entirety, Mr. Kapoor has also argued that the views of the NML on the causes of failure of the extruder screw, read with the conclusions of the CMERI report, would support the contention of the OP that the most likely cause of this failure was the wear and tear which was not covered by the insurance policy. He has pointed out that the machine had been regular use for nearly five years when the failure of the screw occurred, which would further strengthen the point that it was because of wear and tear in course of normal operations. In short, Mr. Kapoor would want us to agree that the OP was justified in repudiating the claim of the complainant on the basis of the survey report and the underlying CMERI report and thus committed no deficiency in service.
An Explanatory Note on Some Technical Terms
16. At this stage, it would be useful to clarify what the terms used in the CMERI and other technical reports signify:
(i) The material of which the twin screws and the barrel of the extruder machine were made was steel, of specific types.
(ii) The most common variety of steel (an alloy of iron and carbon) is known as carbon steel, which rusts when exposed to air and moisture and is not stainless steel. Stainless steel differs from carbon steel by the amount of chromium present. [Source: http://en.wikipedia.org/wiki/Carbon_steel].
Considering the chemical composition of the steel of the screws and the barrel, as determined by the CMERI, they were made of (some special variety/ies of) stainless steel.
(iii) Hardness of steel depends on its carbon content by and large, the higher the carbon content, the harder the steel, though once the carbon content increases beyond 0.7%, the increase in hardness tends to taper off. [Source: http://www.materialsengineer.com/E-Alloying-Steels.htm].
(iv) Vickers Pyramid Number (VPN) is a measure of hardness of materials according to the Vickers hardness test. The unit of hardness given by the test is known as the Vickers Pyramid Number (HV) or Diamond Pyramid Hardness (DPH). [Source: http://en.wikipedia.org/wiki/Vickers_hardness_test]. A hard material can scratch a less hard material but not vice versa.
(v) Martensite or Martensitic steel means a very hard form of steel crystalline structure The martensite is formed by rapid cooling (quenching) of austenite which traps carbon atoms that do not have time to diffuse out of the crystal structure. [Source:
http://en.wikipedia.org/wiki/Martensite]
(vi) (a) Austenite is a metallic non-magnetic allotrope of iron. Above 912C and up to 1,394oC, alpha iron undergoes a phase transition from body-centred cubic (BCC) to the face-centred cubic (FCC) configuration of gamma iron, also called austenite. This is similarly soft and ductile but can dissolve considerably more carbon (as much as 2.04% by mass at 1,146oC). This gamma form of iron is exhibited by the most commonly used type of stainless steel. [Source: http://en.wikipedia.org/wiki/Austenite].
(b) An allotrope is a variant of a substance consisting of only one type of atom. It is a new molecular configuration, with new physical properties. We mention this only to clarify what austenite is in relation to martensite, the latter being a term used frequently in the CMERI report.
(vii) Ferrite is the phase of carbon steel which has BCC configuration (vide (vi) (a) above) and can hold very little carbon, typically 0.0001%.
(viii) Cementite is a very hard intermetallic compound consisting of 6.7% carbon and the rest iron.
(ix) Pearlite is a mixture of alternate strips of ferrite and cementite in a single grain of carbon steel.
(ix) The following paragraph would explain the implications of the process of slow (or rapid) cooling of molten steel and, in that context, the inter-relationship of austenite, ferrite, pearlite and martensite, the latter three being the terms used in the CMERI and other reports:
Cooling of steel with carbon below 0.8%- When steel solidifies it forms austenite. When the temperature falls below the A3 point (910oC - supplied), grains of ferrite start to form. As more grains of ferrite start to form, the remaining austenite becomes richer in carbon. At about 723C, the remaining austenite, which now contains 0.8% carbon, changes to pearlite. The resulting structure is a mixture consisting of white grains of ferrite mixed with darker grains of pearlite.
As against this, If steel is cooled rapidly from austenite, the FCC structure rapidly changes to BCC leaving insufficient time for the carbon to form pearlite. This results in a distorted structure that has the appearance of fine needles. There is no partial transformation associated with martensite, it either forms or it doesnt. However, only the parts of a section that cool fast enough will form martensite; in a thick section it will only form to a certain depth, and if the shape is complex it may only form in small pockets. The hardness of martensite is solely dependent on carbon content; it is normally very high, unless the carbon content is exceptionally low. [Emphasis supplied] [Source (vii) to (ix):
http://www.gowelding.com/met/carbon.htm
(x) Metallography means the study of the physical structure and components of metals, typically using microscopy.
[http://en.wikipedia.org/wiki/Metallography]
(xi) Fractography (a term used in the NML report) means, the study of fracture surfaces of materials. Fractographic methods are routinely used to determine the cause of failure in engineering structures, especially in product failure .. One of the aims of fractographic examination is to determine the cause of failure by studying the characteristics of a fracture surface. .. Initial fractographic examination is commonly carried out on a macro scale utilising low power optical microscopy. In many cases, fractography requires examination at a finer scale, which is usually carried out in a scanning electron microscope or SEM.
[http://en.wikipedia.org/wiki/Fractography] Discussion
17. The issues relevant for adjudication of the dispute are only two: (i) did the alleged incident of some miscreants inserting steel pieces into the extruder barrel with a view to damaging it actually take place as claimed by the complainant, i.e., was there a malicious damage to the insured extruder machine and (ii) if so, were these steel pieces the sole or, at least, the precipitating cause of the damage leading to breaking of one screw or the screw broke due to wear and tear?
18 (i) According to Mr. Kapoor, learned counsel for the OP insurance company, the incident did not take place as alleged, and the report dated 04.11.1992 of the Police Officer concerned (paragraph 2 (xi) supra) was a procured document for, no unbiased Police Officer would ever write to a complainant that the incident underlying a crime reported by the latter to the Police was already established as true while the matter was sub judice before the competent criminal court. Prima facie, this argument has some merit. However, Mr. Kapoor had no answer when he was confronted by Mr. Pattjoshi, learned counsel for the appellant/complainant with the report of the OPs own Investigator, Shri Bhattacharjee (paragraph 12 (ii) supra). The latter had been specifically appointed by the OP to investigate the admissibility of the claim (paragraph 2 (xvi) supra). The detailed report of this Investigator not only found that the incident took place as alleged but also explained who, prima facie were likely responsible for the sabotage and what their likely motives were. From this report (which we have reproduced in its entirety, vide paragraph 12 (ii) supra), it has to be concluded that the incident reported by the complainant was indeed the act of some disgruntled temporary employees of a contractor engaged by the complainant whose services had been recently discontinued. This was thus a clear case of malicious damage to the insured machine. We add that in coming to this view, we have considered the preponderance of probabilities and not the rigorous standards of proof required for establishing a criminal charge.
(ii) Also, in our view, what seems to have prolonged a conclusive determination of this issue, and hence the whole proceedings, for such a long period was obviously the fact that neither before the State Commission during the three rounds of trial of the complaint nor this Commission in the course of the first two appeals does this report of the Investigator appear to have been produced by the OP because none of these orders takes notice of such a report. It is really unclear as to the stage when this report was disclosed by the OP. Be that as it may.
19 (i) Because of the conflicting conclusions of the technical reports on record, determination of the second issue requires us to further examine these technical observations/conclusions.
(ii) This Commission, even its first order of remand, emphasised the need for reference of the second issue to an independent expert metallurgical institution. However, the report of NML, the only real expert institution in the field of metallurgy, left the basic question unanswered in fact, it did not even attempt a comment on any of the technical reports but merely offered the gratuitous advice that the case should be closed. Unfortunately, we cannot afford that luxury.
(iii) (a) The CMERI report came to the conclusion that on the basis of the available evidence, the fracture of one of the two screws of the extruder could not be attributed to the insertion of any foreign material because of the scratchless surface of the barrel as well as the screw even where the steel pieces were stated to have been introduced. Secondly, because the screw had already developed micro-cracks, any overloading of the PVC material or uneven heating of the said material could cause the breakage of the screw. The report went on to state that (1) more information on the past history of the heating elements was necessary and (2) in the absence of any certificate of the manufacturers regarding quality assurance it could not be established if the micro-cracks had developed during the heat treatment of the screw or its coating with a hard surface.
(b) It is thus clear to even a lay person that the principal conclusion of the CMERI that the screw did not fracture because of jamming by any foreign material was based on the absence of scratches on the surface of the affected screw or the barrel. This is, to put it mildly, an unscientific argument. The hardness index (VPN) of the extruder screw was 275 and that of the barrel 350, according to CMERIs own measurements. As against this, the CMERIs measurements of the VPN of five of the six steel pieces supplied to it by the surveyor ranged between 142 and 163, and only for the sixth, the VPN was 230. Even High School Physics would show that with such hardness levels (142-230), none of these steel pieces could have produced scratches on a screw with VPN of 275, leave alone on (the inner surface of) the barrel with VPN of 350. In its own discussion on this point, the CMERI report conceded, Hence, it is established that a material of lower hardness cannot make scratches over a material of higher hardness without any evidence of rub on the component of lower hardness. In our view, it is a pity that in its enthusiasm for lecturing on what should have been done by all others concerned, the NML report failed to notice and comment on the reasoning of the CMERI report even on this elementary point. Per contra, suffice it to add that the reports of both Shri Mukherjee and Shri Ray emphasised the absurdity of the conclusion of the CMERI on this point in the face of its own measurement values of VPN.
(c) As the second ground for its conclusion that the fracture of the screw was not because of insertion any foreign material, the CMERI report cited the possibility of overloading of the PVC material and uneven performance of the heating elements around the barrel.
Heat generated by these elements melted the solid feed into a dense viscous mass which, in turn, was kneaded, mixed and homogenised and also pushed downstream by the counter-rotating motions of the twin screws inside the barrel. It would appear that the basis of this observation/conclusion is that such overloading of the solid material at the feeding end of the barrel and the uneven/inadequate heating of the barrel would produce uneven hard lumps of the feed material, the forced longitudinal outward movement of which would, in turn, lead to overloading stress forces/torques that, coupled with the pre-existing micro-cracks at the base of the screw (i.e., its prior weakening), could have caused the fracture. On this aspect, we need to observe that there was no evidence before the CMERI that either the solid PVC constituents had been over-loaded on the relevant day at the relevant point of time or that the heating elements were malfunctioning and unable to produce the right temperature gradient inside the barrel along its entire length, particularly in the region of the fracture site. That the latter ground was conjectural is clear from the CMERI report itself, which noted, more information is required about the past history of heating elements. There was no attempt by the CMERI to check either with the manufacturer or from publicly available technical material to ascertain what the heating element insulation or other characteristics were designed to be and what they actually found, particularly when both the M & P and CMERI representatives jointly inspected the machine at the factory premises in July 1990.
(d) As regards how the micro-cracks noticed by the CMERI in the metallographs of the fractured screw developed, i.e., whether during heat treatment or during hard surface coating, we may simply observe that this is immaterial for determination of the second issue before us.
(iv) We also feel it necessary to address some of the other points made in the CMERI report under the heading, Discussion, which has been quoted verbatim in the surveyors report as the sole justification to recommend repudiation of the complainants claim for indemnification of the loss.
(a) According to the CMERI, the steel pieces inserted into the barrel should have travelled down the length of the barrel from the point of insertion because of the counter-rotating/forward-pushing motion of the twin screws inside the barrel and hence the fracture of one of the screws, if caused by jamming due to these steel pieces, should have occurred downstream of the point of introduction of the steel pieces, i.e., downstream of the vacuum glass opening where these steel pieces were stated to have been inserted. Instead, the screw fractured well upstream of the vacuum glass opening on the barrel and hence the fracture was not due to the inserted steel pieces. This argument is squarely discounted by the reports of S/Shri Mukherjee and Ray. Shri Mukherjee (a Metallurgist), in particular, opined (and, to our mind, rightly) that the steel pieces would instantly jam the motion of the counter-rotating screws at the point of insertion because the designed clearance between . the conical rotary screws and the extruder chamber was of the order of only 0.25 mm and that the entire chamber was full of the hot plastic (viscous) mass at the time of failure; any extraneous bits introduced inside the running chamber (through the sight hole) would instantly jam the screws not allowing the introduced bits to travel any distance towards the exit end but foul the rotating screws. the effect of the bits introduced would only be to brake or stop instantly the rotary motion of the screws while the full torque was in force at the driving end via the geared motor. Failure had to result for the palpable reason that the constantly applied torque was being opposed by an opposing braking force equal to or greater in magnitude from that of the applied torque. Under such set of circumstances the screw should rupture at any point between the point of introduction of the steel bits and the thrust bearing support at the charging end and not at any point beyond the point of introduction towards the exit end as erroneously supposed by the authors of the Investigation Report of the CMERI.
As to the final question where and at which point then the rupture by shear should and could take place .. the .. conclusion . should be: the screw ruptured at and along one of the stress concentration points and planes that already existed as supported by the metallographs enclosed. [Emphasis supplied] These appear to be reasonable arguments, based on straightforward scientific interpretation, with which we are, therefore, inclined to agree.
(b) We may add that the CMERI report did not mention the average size of the steel pieces investigated by it. The design clearance between the screws and the barrels inner surface was only 0.25 mm or 250 microns (i.e., about the diameter of a bundle of ten average strands of human hair). On the other hand, there is no mention of the dimensions of the opening in the barrel surface through which the steel pieces were reported to have been inserted. Is it possible that the steel pieces inserted by the miscreants were of such dimensions as to pass easily downstream of the point of their insertion soon after they were so inserted or was it that after their rotary rubbing action against the much harder surfaces of the screw face and the inside of the barrel, their sizes got quickly reduced which made it possible for them to pass? There is no answer to these questions, which could have thrown light on the very possibility of inserting steel pieces in the barrel. Neither the surveyors representative nor that of the CMERI seems to have examined this aspect during their visit to the factory in July 1989. In the absence of such details, the likely, commonsense situation appears to be that the miscreants, who were certainly not technically qualified to be aware of the inside design clearance between the barrel and the screws or their hardness parameters, chose steel pieces of such common sizes as would be easily available, could be quickly and conveniently inserted through the opening in the barrel and could jam the rotary motion of the screws because, damage to the machine (or, at least its jamming) was their objective.
(c) (i) The CMERI report also observed that the chemical composition, hardness value and also the micro-structure of the supplied specimen of steel pieces selected randomly from the packets A and B did not confirm that all of the pieces were foreign materials. Rather out of four, two of them were very close to the screw material in respect of chemical composition, hardness and microstructure.
(ii) We are unable to see the basis of these conclusions. First, the hardness values of five of the steel pieces, as already noticed, ranged between 142 and 163, and only for the sixth, the VPN was 230. The VPN of the screw was 275 in fact, further down the report, the CMERI observed, in the context of optical microscopic examination of the fractured screw, the following, . three different phases of the microstructure at the fracture and near fracture zone from case to core, consisting a thin hard surface coating layer A (of micro-hardness about 720 VPN) and a thin martensitic peripheral layer B (of micro-hardness about 550 VPN) that extended into the original heat treated structure of fine tempered martensite C (of micro-hardness about 310 VPN). Thus, on hardness value alone, the screw material was way above the observed hardness values of the steel pieces.
(iii) In respect of microstructure, the CMERI report itself observed from the metallographs, Photograph No. 15 represents that general microstructure of the screw, consisting of fine tempered martensite. Photograph No. 19 displays the microstructure of the sample a0 from the packet A consisting of tempered martensite. Photograph No. 20 depicts the microstructure of the sample a1 from the packet A revealing ferrite-pearlite micro-constituents. Photograph No. 21 delineates the microstructure of the sample b0 from the packet B. It contains tempered martensite in the matrix of ferrite. [Emphasis supplied]. Even from our limited discussion of the difference between ferrite, pearlite and martensite (vide paragraph 16 supra), it is clear that in respect of microstructure, only two samples, viz., a0 and b0 resembled the screw material. No comments are available on the remaining four samples, a1, a2, b1 and b2. [Emphasis supplied]
(iv) On chemical composition, we need notice no more than the fact that it was possible for the CMERI to analyse only the screw material fully, vide Tables I and II of the CMERI report reproduced above.
(d) A lateral question that arises is why an independent (Council of Scientific and Industrial Research CSIR) institution of the Central Government should make a report which shows such inconsistencies as are obvious to even lay persons with an average familiarity with science. It would appear that it was because of the background briefing that one of the surveyors of M & P provided during his repeated discussions with the scientists of the CMERI. In our view, it would have behoved the surveyor, as an impartial loss assessor, to have investigated the design parameters of the extruder machine, particularly the average working life span of various crucial components vis a vis the number of hours the machine had been in use and the point at para. 19(iv)(c)(ii) above if it wished to arrive at infallible conclusions instead of mere speculative attempts to sow sees of suspicion. It appears that the initial report titled, Memorandum of the State of Affairs drawn up by Shri B. Chatterjee, the first surveyor on behalf of M & P was never produced by the OP. This report could have shown if any of these issues were investigated. The surveyors tendency to economise on truth is also writ large in the sentence in its report, The insured had confirmed receipt of our letter and also confirmed acceptance of the findings of CMERI by their letter 23/4/91. In the voluminous compilation of documents filed by the complainant (and also relied upon by the OP before us) there is no copy of any letter dated 23.04.1991 written by the complainant. In this context, we may simply observe that had it been really the case that in April 1991, the complainant had confirmed in writing its acceptance of the CMERI report, the matter would have ended in 1991-92. Moreover, the complainant was given a copy of the CMERI report only in January 1993.
20. We need not discuss the report of the RITES beyond noticing its internal inconsistency:
The report signed by the General Manager, RITES stated, In conclusion, it may be indicated that external tampering of the machine by miscreants led to a situation where screws which were already having micro-cracks gave away. Had there been no external tampering, it is quite possible that the machine would have been working for quite some time thereafter.
However, the technical report signed by the two Metallurgists, on which the former report appears to have been based, observed,In our opinion, the failure of the screw took place due to the existence of micro-cracks and presence of residual stresses as reported by C.M.E.R.I. Introduction of foreign materials might have helped the jamming of the operation vis--vis some contribution in augmenting further development of the crack. But we are of the opinion that had not there been any micro-crack on this screw as well as presence of residual stresses, the incident could not have happened only by introduction of foreign materials. [Emphasis supplied] This constrains us to observe that such lack of scientific application does not behove an Organisation like the RITES, another Central Government public sector undertaking.
21. In view of the foregoing discussion, we allow the appeal of the complainant/appellant and set aside the impugned order dated 15.03.2005 of the State Commission. According to Mr. Pattjoshi, the insurance claim of the complainant/appellant represents 50% of the cost of the replacement (new) barrel and screws, the deduction being on account of depreciation of the barrel and screws for 5 years during which they had been in use. Further, the salvage value of Rs.75, 000/- of the scrap had also been deducted in arriving at the claim amount of Rs.10, 28,585/-. The OP insurance company shall accordingly pay to the complainant the sum of Rs. 10, 28,585/- towards the insurance claim, with interest @ 9 per cent per annum from the date of the complaint till actual payment. In addition, the OP shall pay cost of Rs. 25,000/- for all the proceedings so far.
22. Mr. Kapoor, learned counsel for the OP/respondent-insurance company has brought to our notice that pursuant to the order dated 26.05.1995 passed by the State Commission, a sum of Rs.10, 97,213/- has been paid to the complainant/appellant. Vide order dated 20.05.2005 passed by this Commission in the present appeal, operation of the impugned order (which is the subject matter of the present appeal) was stayed on the condition that the complainant/appellant would furnish bank guarantee for the amount received by it. The complainant/appellant had accordingly furnished bank guarantee and has revalidated it from time to time. In view of the award made in this order, we direct that the said amount shall be retained by the complainant/appellant and the bank guarantee furnished by it shall stand discharged. After adjusting the said amount, the balance amount in terms of this order shall be paid by the insurance company to the complainant/appellant within six weeks from the date of this order.
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[R. C. Jain, J] [Anupam Dasgupta]