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Judgment
Ram Surat Ram Maurya, Presiding Member
Heard Mr. Mohan Babu Agarwal, Advocate, for the appellant and Ms. A. Subhashini, Advocate, for respondent-1.
Above appeal has been filed from the order of State Consumer Disputes Redressal Commission, Andhra Pradesh, dated 24.02.2009, passed in CD/37/2005, partly allowing the complaint and directing the Insurer to pay Rs.911680/- with interest @12% per annum, from 01.12.2000 till the date of payment, as insurance claim and Rs.5000/- as cost of the litigation.
The office has reported 79 days delay, in filing the appeal. The appellant has filed an application for condonation of delay. Cause shown is sufficient. Delay in filing the appeal is condoned.
Deepika Cements Private Limited (the Insured) filed CD/37/2005 for directing Oriental Insurance Company Limited (the Insurer) to pay Rs.25/- lacs, with interest @18% per annum, from 25.08.2000 till its realization, as the insurance claim and any other relief which may deemed fit and proper. The complainant stated that the Insured was private company, registered under the Companies Act, 1956 and engaged in the business of manufacture and sale of cements, from its factory, situated at Plot No. K-5, IDA, Rd. No.-5, Nacharam, Hyderabad. The cement was manufactured from grinding clinker, gypsum etc. as raw materials. The Insured obtained Standard Fire and Special Perils Policy No. 431301/2001/258, for the period of 16.06.2000 to 15.06.2001, for a sum of Rs.40/- lacs (i.e. Rs.25/- lacs, for stock of clinker in open, Rs.5/- lacs, for clinker, gypsum & grinding media in process, Rs.50000/-, for cement in process, Rs.8.5/- lacs, for finished products and Rs.one lac, for gunny bags & pkg. materials, stored at the factory premises) from the Insurer. Heavy rain hit the Andhra Pradesh state, including Hyderabad and Secunderabad due to depression which ultimately turned as cyclone from on 22.08.2000 to 30.08.2000. Due to unprecedented and continuous rain, flood water entered at the factory premises of the Insured on 24.08.2000. Flood water and continuous rain water washed away, the clinker stocked in open place at factory premises. The Insured intimated the loss to Oriental Bank of Commerce on 25.08.2000, from where, he took term loan of Rs.18/- lacs and working capital facility of Rs.29/- lacs, with request to inform the Insurer. The Insured informed the Insurer about the aforesaid loss through letter dated 31.08.2000. The Insurer appointed D.V. Bhaskara Reddy, Hyderabad, as the surveyor, who inspected the factory premises on 02.09.2000. Thereafter, the surveyor neither turned up again nor made any correspondence with the Insured. D.V. Bhaskara Reddy, vide letter dated 15.11.2000 informed that (i) Raw materials in open were found wet during inspection. (ii) There was no evidence of flood or inundation in the premises. (iii) The damage to the stocks was due to unprecedented rain fall of 24 cms on 23.08.2000 only and not due to flood, storm and cyclone; and (iv) The policy did not cover loss due to rain water, as such, the Insurer had no liability. The Insured through letter dated 21.11.2000, strongly protested the said letter and asked the surveyor to provide the photographs taken by him during his inspection on 01.09.2000, on the basis of which, he had reported that raw materials in open were found wet. The surveyor however did not respond. The Insured, vide letter dated 13.12.2000, complained to the Insurer that the surveyor was not making any correspondence with him. D.V. Bhaskara Reddy, vide letter dated 29.12.2000, recused from conducting survey due to his health issue. The Insurer then appointed Sisir & Ravi Associates, Visakhapatnam, a new surveyor on 19.01.2001, who allegedly visited the factory premises of the Insured on 29.01.2001 and found it as locked. New surveyor, vide letter dated 01.02.2001, asked the Insured to submit claim form on the proforma and also sent an inventory requiring various information. Managing Director of the Insured met in an accident and hospitalized as such the Insured vide letter dated 31.03.2001, requested the surveyor to extend the time for submitting claim form and information. After recovery, the Managing Director submitted claim form and duly filled up inventory on 20.04.2001. The surveyor, vide letter dated 14.05.2001, acknowledged receiving of the papers and demanded some more documents, which were supplied on 10.07.2001 as its auditor was out of country in the meantime. The surveyor visited the factory premises on 14.08.2001, in evening. At that time heavy rain fall was going on, as such, he could not inspect the place, where the loss had occurred and the drains through which the clinker was washed away. The surveyor, vide letter dated 15.09.2001, asked the Insured to submit cash book, ledger, balance sheet, tax returns etc., which were supplied on 24.09.2001, except the books of stock as at that time, audit of the company was going on. The surveyor held meetings during 25th to 28th February, 2002. The surveyor, vide letter dated 08.03.2002, informed that availability of stock allegedly damaged on 24.08.2000 was proved but relying upon the letter of previous surveyor dated 15.11.2000, he submitted that the loss was not payable under the policy. The Insurer, vide letter dated 21.03.2002, closed the claim case, on the allegations that the Insured had not co-operated the surveyor. The Insured, vide letter dated 10.04.2002, informed the Insurer that he had supplied all the required papers to the surveyor and allegation that he had not co-operated the surveyor, was incorrect. The Insured requested to settle the claim at the earliest. The surveyor then vide letter dated 26.04.2002, demanded Statement of Accounts of all the suppliers of clinker, from beginning of the business till August, 2000. The surveyor, by another letter dated 30.04.2002 and reminder dated 04.06.2002, demanded the papers. The Insured, vide letter dated 28.06.2002, informed that all these papers were supplied except Statement of Account of the suppliers. The surveyor submitted his report dated 20.11.2002, assessing the loss to Rs.911680/- but relying upon letter dated 15.11.2000, he recommended that the claim was not admissible. The Insurer, vide letter dated 17.09.2003, repudiated the claim. Then the complaint was filed, claiming deficiency in service.
Oriental Insurance Company Ltd. (the Insurer) filed written reply and contested the complaint. The Insurer stated that on receiving information of the incident, the Insurer appointed D.V. Bhaskara Reddy as the surveyor, who on spot inspection, vide his letter dated 15.11.2000, observed that stock of clinker in open place was wet with rain water and there was no flood and inundation. He, vide his letter dated 29.12.2000, informed that the Insured was not co-operating with him and he had go for surgery as such, he recused from survey. The Insurer, vide letter dated 19.01.2001, appointed M/s. Sisir & Ravi Associates, a new surveyor, who vide letter dated 01.02.2001, demanded various information. The Insured supplied the inventory on 20.04.2001, without proper answer/information. The surveyor again vide letter 14.05.2001, requested to supply the required documents. Stock Register, Inward-Outward Register, Lorry receipts, proof of dispatch of Stock, which were necessary for assessment of loss were not supplied. The surveyor wrote reminders in this respect dated 20.02.2001, 28.03.2001, 15.09.2001 and 06.03.2002 but the Insured did not respond properly and failed to prove that stock of clinker of Rs.25/- lacs was available on 24.08.2000. The claim of the Insured was closed vide letter dated 21.03.2002. The Insured again approached the Insurer and requested to settle the claim. Then the surveyor again wrote letters dated 26.04.2002, 30.04.2002 and 04.06.2002, demanding papers. The Insured did not supply all the required papers. The surveyor submitted his Survey Report dated 20.11.2002. Then the Insurer also wrote a letter dated 24.01.2003, calling upon the Insured to submit papers. The Insured failed to prove that stock of clinker of Rs.25/- lacs was available on 24.08.2000. After waiting for a sufficient period, the claim was repudiated vide letter dated 17.09.2003 on the grounds, namely (i) In claim form, you had claimed that stock of material and finished goods worth Rs.35/- lacs was damaged but availability of 1500 MTs clinker on the date of loss was not proved. (ii) On physical inspection, it was found that there was no sign of flood or inundation and no trace of displacement of material in and around your premises, relating to washing away large quantity of clinker was found. (iii) The photographs of your premises and the stocks in open, did not depict any sign of water level markings on the outer side of the walls or any soil erosion and disturbed position of heaps of clinker in your premises. (iv) As per the survey report, the stock of raw materials in open were found to be wet due to rain and there was no damage of stock of finished material. (v) No authentic proof was given regarding loss due to flood. In the absence of stock register, sales tax returns, excise duty returns, purchase bills, sales record etc., availability of 1500 MTs clinker on the date of incident was not proved. Non supply of papers to prove the claim and basing claim on fabricated documents was a ground for repudiating the claim under Clauses-6(1) and 8 of General Conditions of the policy. There was no deficiency on their part.
The Insured filed Affidavit of Evidence of P. Prasad Rao. The Insurer filed Affidavit of Evidence of Y. Ramulu, Regional Manager and Affidavit of Evidence of Sisir Kumar, the surveyor. State Commission, vide impugned judgment dated 24.02.2009, held that due to health issue, the first surveyor recused from conducting survey. The Insured supplied the papers as demanded by second surveyor on 20.04.2001. Then some more papers were demanded which were supplied on 24.09.2001, along with floppy. But the surveyor wrote a letter dated 08.03.2002 that required papers were not supplied. The Insured wrote a letter dated 10.04.2002 that all the papers were supplied and requested to settle the claim. Vide letter dated 28.06.2002, the Insured specified that all the required papers were supplied to the surveyor. Then the surveyor submitted Survey Report on 20.11.2002. There was no exclusion clause, which excludes the loss due to heavy rain. However, State Commission has accepted the assessment of loss as done in the report dated 20.11.2002. On these findings, the complaint was partly allowed and the Insurer was directed for payment as stated above. Hence this appeal has been filed.
I have considered the arguments of the counsel for the parties and examined the record. According to the Insured, heavy rain hit the Andhra Pradesh state, including Hyderabad and Secunderabad due to depression which ultimately turned as cyclone from on 22.08.2000 to 30.08.2000. Due to unprecedented and continuous rain, flood water entered at the factory premises of the Insured on 24.08.2000. Flood water and continuous rain water washed away, the clinker stocked in open place at factory premises. D.V. Bhaskara Reddy, the first surveyor, inspected the factory premises on 02.09.2000. He, vide letter dated 15.11.2000, informed that (i) Raw materials in open were found wet during inspection. (ii) There was no evidence of flood or inundation in the premises. (iii) The damage to the stocks was due to unprecedented rain fall of 24 cms on 23.08.2000 only and not due to flood, storm and cyclone; and (iv) The policy did not cover loss due to rain water, as such, the Insurer had no liability. The Insured through letter dated 21.11.2000, strongly protested the said letter and asked the surveyor to provide the photographs taken by him during his inspection on 01.09.2000, on the basis of which, he had reported that raw materials in open were found wet. The said photographs were neither supplied nor produced before State Commission. As such, the Insurer has failed to prove that raw materials of clinker was only wet and not washed away. Second surveyor visited the factory premises on 14.08.2001, in evening i.e. after one year. At that time heavy rain fall was going on, as such, he could not inspect the place, where the loss had occurred and the drains through which the clinker was washed away. The Insured has filed Report of Meteorological Department, which states that between 22nd and 24th August, 2000, the twin cities of Hyderabad and Secunderabad experienced the wettest spell in 92 years due to heavy downpour of rain. The rainfall measured 24 cm on a single day on 24th August, 2000. Many areas of these cities were inundated. As such, it is proved that cause of loss was inundation due continuous rain fall and not only the rain.
The surveyor has assessed the loss to Rs.911680/-, in Survey Report dated 20.11.2002, on the basis of papers produced by the Insured. Although in Claim Form, the Insured has claimed loss of Rs.25/- but it was not found as proved. The Insurer could not point out that the Insured had submitted any fabricated paper in order to invoke Clauses-6(1) and 8 of General Conditions of the policy.
In view of the aforesaid discussions, I do not find any ground to interfere with the order of State Commission. The appeal has no merit and is liable to be dismissed.
ORDER
In view of the aforesaid discussions, the appeal is dismissed. The parties shall bear their own costs.