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Judgment
Heard Mr. S.M. Tripathi, Advocate, for the appellants and Mr. V.K. Mishra, Advocate, for the respondent.
The New India Assurance Company Limited and others (the opposite parties) have filed above appeal from the order of State Consumer Disputes Redressal Commission, Maharashtra, dated 10.07.2015, passed in CC/07/158, partly allowing the complaint and directing the appellants to pay Rs.8337905/- with interest @9% per annum from 12.10.2007 till realization, as insurance claim and Rs.25000/- as the cost of litigation.
The office has reported 14 days delay in filing the appeal. The appellants have filed IA/8804/2015 for condonation of delay. Cause shown is sufficient. Delay in filing the appeal is condoned.
M/s. Krupa Chaton Manufacturing Company Pvt. Ltd. (the respondent) filed CC/07/158, for directing the appellants to pay (i) Rs.8337905/- with interest @18% per annum from 05.12.2005 till realization, as the insurance claim, (ii) Rs.5/- lacs, as exemplary damages, (iii) cost of the litigation; and (iv) any other relief, which is deemed fit and proper in the facts and circumstances of the case.
The facts as stated in the complaint and emerged from the documents attached with it are as follows:-
(a) M/s. Krupa Chaton Manufacturing Company Pvt. Ltd. (the complainant), (the Insured) was a company, registered under Indian Companies Act, 1956 and engaged in the business of manufacture and sale of plain white and coloured glass beads, tubes and rods, which were cut into small pieces/beads and used for decoration in saries/fancy materials. The complainant had various factories/ storage and different locations. The present claim was in respect of loss of Building, Stock and Machinery of Art Glass Industries, situated at village Abrama, National Highway No.8, district Valsad, of its buildings, denoted as Building-1 and Building-3, in the diagram prepared by the surveyor in its report dated 15.03.2006.
(b) The New India Assurance Company Limited (the opposite party) (the insurer) was a public insurance company and engaged in the business of providing insurance services. The Insured obtained Standard Fire and Special Perils Policy No. 111100/11/04/01196, from the Insurer for the period of 30.12.2004 to 29.12.2005, for sum insured of Rs.396/- lacs (i.e. Rs.130/- lacs for the Stock of raw materials, semi-finished, finished goods and packing materials, Rs.136/- lacs for the Building and Rs.130/- lacs for the Machinery). Standard Fire and Special Perils Policy No. 111188/11/04/01205, from the Insurer for the period of 31.12.2004 to 30.12.2005, for sum insured of Rs.15042000/-, on Stock of raw materials, semi-finished goods, finished goods, packing materials, Chemicals. Lists of risk locations were attached to the policies.
(c) There were heavy rainfalls on 28.06.2005, in Valsad region, resulting flood in whole area. The drain/nallah adjoining the Insured’s factory premises at village Abrama, National Highway No.8, district Valsad was overflowed with dirty water and damaged Stock of raw materials, semi-finished goods, finished goods, packing materials. The Insured informed the Insurer about the loss on 29.06.2005. The Insurer appointed A.S. Engineers, Mumbai as the preliminary surveyor, who inspected the building on 29.06.2005 and submitted his Preliminary Survey Report dated 01.07.2005, affirming incident of inserting flood water in the building and damage to Stock of raw materials, semi-finished, finished goods, packing materials.
(d) On 05.07.2005 around 15:50 hours, Building-3 collapsed. The Insured again informed the Insurer about this incident. The Insurer instructed A.S. Engineers, Mumbai to cover this incident also. The surveyor inspected the building on 06.07.2005 and submitted his Preliminary Survey Report dated 08.07.2005, in which he affirmed incident of collapsing building due to earlier flooding.
(e) The Insurer appointed Navin Jain, Surveyor & Loss Assessor, Mumbai as the surveyor on 09.07.2005, for survey and assessment of loss. The surveyor inspected the premises on 09.07.2005, verified the damaged stock, plant, machinery & building and collected papers relating to loss. He submitted Final Survey Report dated 15.03.2006, stating that (i) Water entry in Building-1 was due to defective flooring/gaps in flooring, which was not a risk covered under the policy and hence loss was not payable; and (ii) Building-3 was fallen down on 05.07.2005; On that day there was no flooding of water; On the date of flood, the building was not fallen down; Falling of the building was due to weakness of the construction, which was not an insured perils. As such loss was not payable. He assessed loss of stock due to dirty muddy water in Building-1 to Rs.558562/- and loss of Building to Rs.923112/-. Loss of Building-3 to Rs.3274281/-, loss of Plant & Machinery in Building-3 to Rs.595851/-, Net loss of Rs.5084215/-. The Insurer vide letter dated 03.04.2006, repudiated the claim on the ground that in view of the report of surveyor, the claim did not fall within purview of the policy.
(f) The Insured instructed B.V. Ram Sharma, Structural Design & Rehabilitation Consultant, Surat to find out the cause of collapse of Building-3,who carried out various tests. He obtained a report from Dr. M.D. Desai, Earth Work Foundation Ground Engineering, Surat dated 08.09.2005, who opined that the flood caused soil heaving & subsidence, which lead to sudden collapse of the building. After considering various test reports and report of Dr. M.D. Desai, B.V. Ram Sharma submitted his report dated 18.09.2005, stating that (i) the defective designing and construction would not permit the structure to with stand for a span of 17 years in partially loaded condition and 5 years in fully loaded condition. There was no overloading in the building at the time of collapse. (ii) The soil investigation report and the detailed analysis of the soil data carried out by Dr. M.D. Desai indicates that the soil subsidence from below the footing at the higher level, towards the lower side and the loss of contact of footing, leading to structural overstressing and subsequent collapse.
(g) The Insured alleged that Mr. Navin K. Jain, the surveyor visited the spot on 09.07.2005 and gave a letter dated 14.07.2015 to the Insured that there was no water level marks on the outer walls of the building; therefore apparently water had entered inside the building from defects/gap in floor and water flooding did not occur in the building, which had collapsed and the building was not fallen due to insured perils. The Insured, thereafter, obtained experts reports dated 08.09.2005 and 18.09.2005, various information from the Insurer under Right to Information Act, 2005 vide letters dated 13.03.2006, 17.05.2006 and 14.09.2006, and tried to give the reports and other papers to the surveyor but he did not accept it. Assessment of loss by the surveyor was also incorrect. Repudiation of the claim on its basis was illegal. The Insured also engaged M/s. Parimal R Shah & Company, Mumbai, a surveyor, duly registered with Insurance Regulatory & Development Authority, for survey and assessment of loss. Who after survey submitted his report dated 11.06.2007, in which, he assessed the loss to Rs.8337905/- in both the incidents and stated that loss had occurred due to flood, which was an insured peril. The Insured filed this complaint on 29.08.2007, alleging deficiency in service.
The opposite parties filed its written reply on 22.08.2008, in which, the material facts have not been denied. It has been stated that as soon as information of flood at the factory of the Insured was received, the Insurer appointed A.S. Engineers, Mumbai as the preliminary surveyor on 29.06.2005, who inspected the building on 29.06.2005 and submitted his Preliminary Survey Report dated 01.07.2005. On 05.07.2005 around 15:50 hours, Building-3 collapsed. The Insured again informed the Insurer about this incident. The Insurer instructed A.S. Engineers, Mumbai to cover this incident also. The surveyor inspected the building on 06.07.2005 and submitted his Preliminary Survey Report dated 08.07.2005, in which he affirmed incident of collapsing building and causing loss to Stock. The Insurer appointed Navin K. Jain, Surveyor & Loss Assessor, Mumbai as the surveyor on 09.07.2005, for survey and assessment of loss. The surveyor inspected the premises on 09.07.2005, verified the damaged stock, plant, machinery & building, took photographs and collected papers relating to loss. He submitted Final Survey Report dated 15.03.2006, stating that (i) Water entry in Building-1 was due to defective flooring/gaps in flooring, which was not a risk covered under the policy and hence loss was not payable; and (ii) Building-3 was fallen down on 05.07.2005; On that day there was no flooding of water; On the date of flood, the building was not fallen down; Falling of the building was due to weakness of the construction, which was not an insured perils. As such loss was not payable. After receiving Final Survey Report, the papers were examined by the competent authority of the Insurer, who vide letter dated 03.04.2006, repudiated the claim on the ground that in view of the report of surveyor, the claim did not fall within purview of the policy. There was no deficiency in service on the part of the Insurer.
The Insured filed Rejoinder Reply on 22.08.2007, in which, the facts stated in the complaint were re-iterated. The Insured filed Affidavit of Evidence of Mr. Parimal Shah, the surveyor, Affidavits of Evidence of Mr. B.V. Ram Sharma and Mr. Utpal P. Shah, Structural Engineer, Affidavit of Evidence of Mr. Hitesh H. Desai, Soil Testing Engineer and Affidavit of Evidence and Additional and Affidavit of Evidence of Dileep Bhujang Pai, the Director of the Insured and various documentary evidences.
State Commission, by impugned judgment dated 10.07.2015, held that the surveyor A.S. Engineers, in his Preliminary Survey Reports dated 01.07.2005 and 08.07.2005, found that flood water entered the building. The Insurer, in the replies, supplied under Right to Information Act, 2005, admitted that there was no clause under the policy, which says that a gap or thermal crack in the grade concrete floor at plinth shall be treated as structural defect. As such, repudiation of the claim on the ground that water inserted in the building through gaps of the flooring was illegal. In Soil Investigation Report dated 08.09.2005, Dr. M.D. Desai after detailed analysis of the soil data, indicated that the soil subsidence from below the footing at the higher level, towards the lower side and the loss of contact of footing, leading to structural overstressing and subsequent collapse of the building, which was also a direct result of flood. A licensed surveyor has assessed the loss to Rs.8337905/-. On these findings the complaint was partly allowed and order as stated above was passed. Hence, the Insurer has filed above appeal. Both the parties have filed their written arguments also.
We have considered the arguments of the counsel for the parties and examined the record. Obtaining Standard Fire and Special Perils Policy No. 111100/11/04/01196, for the period of 30.12.2004 to 29.12.2005, for sum insured of Rs.396/- lacs (i.e. Rs.130/- lacs for the Stock of raw materials, semi-finished, finished goods and packing materials, Rs.136/- lacs for the Building and Rs.130/- lacs for the Machinery), Standard Fire and Special Perils Policy No. 111188/11/04/01205, for the period of 31.12.2004 to 30.12.2005, for sum insured of Rs.15042000/-, on Stock of raw materials, semi-finished goods, finished goods, packing materials, chemicals and Art Glass Industries, situated at village Abrama, National Highway No.8, district Valsad, where both the loss had occurred was covered in lists of risk locations, attached to the policies are not disputed.
Navin K. Jain, in his Survey Report dated 15.03.2006, has prepared a diagram of the factory premises, in which Building-1, where flood water inserted on 28.06.2005 and Building-3, which collapsed on 05.07.2005, are shown adjoining to each other. Building-3 had basement + 3 floors. The surveyor A.S. Engineers, who inspected the spot on 29.06.2005, in Preliminary Survey Report dated 01.07.2005 found that there was dirty and muddy water flooding and water logging from 8:00 AM to 4:00 PM in the building causing damage to stock and machinery. He made second inspection on 06.07.2006 and in Preliminary Survey Report 08.07.2005, found that the building collapsed due to earlier flooding. His reports were based upon his first sight inspection, immediately after the incident. The surveyor Navin K. Jain inspected the spot on 09.07.2005. He, in his Survey Report dated 15.03.2006, found that as there were no marks of water on the outer walls of the building as such the water had entered through defective flooring/gaps in flooring. This report is conjectures and surmises. If pressure of ground water was below the level of the floor of building there would no chance of coming water through floor and in any case there would be no dirty and muddy water flooding as mentioned in Preliminary Survey Report. From Preliminary Survey Report dated 01.07.2005, it was fully proved that due to heavy rainfalls there was flood and dirty and muddy water entered into both the buildings, causing water logging.
The Insured instructed B.V. Ram Sharma, Structural Design & Rehabilitation Consultant, Surat to find out the cause of collapse of Building-3, who carried various tests. He obtained a report from Dr. M.D. Desai, Earth Work Foundation Ground Engineering, Surat dated 08.09.2005, who opined that the flood caused soil heaving & subsidence, which lead to sudden collapse of the building. After considering various test reports and report of Dr. M.D. Desai, B.V. Ram Sharma submitted his report dated 18.09.2005, stating that (i) The defective designing and construction would not permit the structure to with stand a span of 17 years in partially loaded condition and 5 years in fully loaded condition. There was no overloading in the building at the time of collapse. (ii) The soil investigation report and the detailed analysis of the soil data carried out by Dr. M.D. Desai indicates that the soil subsidence from below the footing at the higher level, towards the lower side and the loss of contact of footing, leading to structural overstressing and subsequent collapse. These reports were proved by Affidavits of Evidence of Mr. B.V. Ram Sharma and Mr. Utpal P. Shah, Structural Engineer, Affidavit of Evidence of Mr. Hitesh H. Desai, Soil Testing Engineer. The Insurer did not dare to cross-examine these witnesses. State Commission has rightly relied upon these report and held that flood had caused loss to both the buildings.
State Commission has relied upon the survey report of M/s. Parimal R Shah & Company, Mumbai, a surveyor, duly registered with Insurance Regulatory & Development Authority, who after survey, submitted his report dated 11.06.2007, in which, he assessed the loss to Rs.8337905/- in both the incidents and stated that loss had occurred due to flood, which was an insured peril. This report was proved by the Affidavit of Evidence of Mr. Parimal Shah, the surveyor. The counsel for the appellant could not point out any illegality in it. The order of State Commission does not suffer from any illegality.
ORDER
In view of the aforesaid discussion, the appeal has no merit and is dismissed. .