Sahakar Maharshi Shankarrao Mohite Patil vs Oriental Insurance Co. Ltd. & Anr

Heard Mr. Dilip Annasaheb Taur, Advocate, for the complainant and Mr. Abhishek Gola, Advocate, for the opposite party.

Sahakar Maharshi Shankarrao Mohite Patil Sahakari Sakhar Karkhana Limited, (the Insured) has filed above complaint for directing The Oriental Insurance Company Limited (the Insurer) to pay (i) Rs.46205818/-, with interest @ 12% per annum, from 17.02.2010 till its payment i.e. the insurance claim, (ii) Cost of the litigation and (iii) 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 the complaint, are as follows:-

(a) The Insured was a co-operative Sugar Factory, registered under Maharashtra Co-operative Societies Act, 1960. The Insured had its sugar factory at Shankarnagar, Akluj, taluka Malshiras, district Solapur, which had crushing capacity of 4500 TCD. The Insured used to crush 9 to 10 lakhs metric tons sugarcane, in every crushing season, which used to be about 180 days. In manufacturing process of the sugar, large quantity of bagasse was produced, which was used for manufacture of paper and fuel in boiler and power generation. The Oriental Insurance Company Limited is a public sector company and provides various types of insurance services. The Insured invited quotations from the insurance companies, for insurance of bagasse for a sum of Rs.5/-crores, for crushing season of 2008-2009. The quotation of the Insurer was found more suitable and accepted by the Insured. The Insurer deposited the requisite premium on 01.04.2009 and Cover Note No.180000130713 was issued on the same day. Later on Standard Fire & Special Perils Policy No. 162603/11/2010/67 was issued on 22.04.2009, in which, Stock of bagasse of Rs.2.5/- crores, in Factory Compound and Rs.2.5/- crores, in Open Compound Behind Administrative Building, was insured from 01.04.2009 to 31.03.2010. The bagasse were stacked in the row, keeping some distance from each row, making its bales, in pyramid shape. The Insured employed watchmen for security of the bagasse in three shift duty for 24 hours. The Insured had hydrant lines and pumps set, near the bagasse depot and also owned its fire tenders, for safety purposes.

(b) On 17.02.2010 at 13:45 hours, the fire was broke out in bagasse depot. The fire was first noticed by the watchman Mane, who immediately informed Mr. K.S. Ektapure, Chief Engineer and Factory Manager. The employees of the Insured tried to control the fire from Fire tender and water pipes etc. but soon it took devastating nature due to high speed wind and became beyond their control. They informed Fire Service Station and nearby sugar factories, from where, several Fire Tenders were deputed on the spot, which could control the fire up to 6:00 hours on 18.02.2010. The Insured informed the local police on 18.02.2010, about the incident, who executed a Panchanama on 18.02.2010 during 12:45 to 13:45 hours. In this Panchanama, the place of incident was noted as Gata No.72/2, near Akluj-Vizori road running east side of Karkhana.

(c) The Insured informed the incident to Branch Manager, Akluj, of the Insurer, on 17.02.2010, on which, the Insurer appointed CA. Birajdar B.S. Surveyor And Loss Adjusters, Solapur, for preliminary survey, who reached the spot on 17.02.2010 at 18:30 hours and inspected the spot in presence of Branch Manager of the Insurer. Photographs were taken and VCD was prepared. He also visited the factory premises on 18.02.2010 and 20.02.2010. He submitted his Preliminary Survey Report dated 22.02.2010, in which, he had mentioned that 10 pyramids of bagasse stacks in new survey No.-72/2 and 14 pyramids of bagasse stacks in new survey Nos.-70 & 71/1 were damaged. The pyramid stacks were near Vijori-Akluj road, outside the factory premises in south east direction of the factory. Baled bagasse damaged with 100% loss totally around 13 pyramid stacks and 2 pyramid stacks were damaged and thrown for safety near nala for controlling the spread up of fire to the other intact pyramid stacking.

(d) The Insurer appointed A.P. Phadke & Co., Mumbai, on 19.02.2010, for survey and assessment of the loss, who inspected the spot on 20.02.2010 and on subsequent dates, prepared inventory and took measurements of saved bagasse. The Insured submitted Claim Form on 20.02.2010, giving expected loss of Rs.457.35 lacs i.e. 15245 MT. The surveyor demanded depot-wise stock record. The Insured informed that no such record was maintained. The surveyor has noted the dimensions of bagasse depot, i.e. length, width and height of each depot. The surveyor in his Final Survey Report dated 14.08.2010, found that standard weight of each bale of bagasse as 9.94 kg. He worked out 5675.835 MT as the burnt bagasse and total loss of Rs.8054968/-. However, he submitted that there were two sums insured in the policy i.e. Rs.2.5/-crores, for bagasse in factory compound and Rs.2.5/- crores, for bagasse in open compound behind administrative building. In the minutes with the Insured on 20.02.2010, it was noted that there was no stock in open compound behind administrative building. The location of loss was in fact outside the factory building. In paragraph-4, he has noted location of loss at Survey Nos.-70, 71/1, 71/2 and 72/2.

(e) The Insured filed the above complaint on 02.08.2011, alleging that Insurer is illegally taking unusual time in settling the claim of the Insured. The Insurer, vide letter dated 03.01.2012, held that the place of incident, where the bagasse were damaged with fire, was not insured in the policy as such, the claim was not payable. However, clarification of the Insured was sought for, giving one more opportunity of hearing before passing final order. As the Insured did not submit any clarification, as such, the Insurer repudiated the claim vide letter dated 22.02.2012. The Insured amended the complaint on 24.07.2012, which was allowed vide order dated 04.09.2012.

(f) The Insured stated that vide letter dated 09.03.2010, the Insured had supplied all the documents, including extracts of revenue records, showing that the names of the Insured was recorded over Survey Nos.-70, 71/1, 71/2 and 72/2. The findings in repudiation letter that the place of occurrence did not belong to the Insured, was incorrect and the claim has been illegally repudiated.

The insurer filed its written reply on 07.01.2013 and contested the matter. The material facts, as stated in the complaint, have not been denied. It has been stated that as soon as the Insurer received information of the fire incident, they appointed CA. Birajdar B.S. Surveyor And Loss Adjusters, Solapur, for preliminary survey, who inspected the spot on 17.02.2010 at 18:30 hours and submitted his Preliminary Survey Report dated 22.02.2010, in which, he had mentioned that 10 pyramids of bagasse stack in new survey No.-72/2 and 14 pyramids of bagasse stack in new survey Nos.-70 & 71/1 were damaged. These pyramids were near Vijori-Akluj road, outside the factory premises, in south east direction of the factory. The Insurer appointed A.P. Phadke & Co., Mumbai, on 19.02.2010, for survey and assessment of the loss, who inspected the spot on 20.02.2010 and on subsequent dates and made inventories. The surveyor submitted Final Survey Report dated 14.08.2010, in which, he had noted location of loss at Survey Nos.-70, 71/1, 71/2 and 72/2. He found that there were two sums insured in the policy i.e. Rs.2.5/- crores, for bagasse in factory compound and Rs.2.5/- crores, for bagasse in open compound behind administrative building. In the minutes with the Insured on 20.02.2010, it was noted that there was no stock in open compound behind administrative building. The location of loss was in fact outside the factory building, which was not insured place. The Insurer vide letter dated 03.01.2012, gave an opportunity to the Insured to submit his explanation but he did not submit any explanation, as such, the claim was repudiated vide letter dated 22.02.2012. There is no deficiency in service on their part of the Insurer and the complaint is liable to be dismissed.

The Insured filed his Rejoinder Reply on 07.05.2013, in which, the material facts as stated in the amended complaint were reiterated. The Insured filed Affidavit of Evidence of Rajendra Nanasaheb Yadav, the law officer of the Insured. The Insurer filed Affidavit of Evidence of Chakradhar Singh, Deputy General Manager. Both the parties filed their short synopsis.

We have considered the arguments of the counsel for the parties and examined the record. At the time of arguments, Mr. Dilip Annasaheb Taur, Advocate, in presence of an officer of the Insured stated that he was not pressing the claim, for loss of bagasse stacks at Survey No.72/2, where there was 2293 Metric Tons bagasse. He restricts his claim for loss of bagasse stacks at Survey No.71/2, where 12945 Metric Tons bagasse were stacked.

A site plan of sugar factory of the Insured, where the incident had occurred was supplied. In letter dated 15.04.2010 (Annexure-P-14), filed with the complaint, total loss of 15245 Metric Tons of bagasse was claimed. The Insured has filed Additional Documents, which contained a diagram on the site-plan on the factory premises, (pages-374-376) in which, total 13 pyramids and 2 loose heaps of bagasse stored in Survey No. 71/2, were shown as burnt. CA. Birajdar B.S. Surveyor And Loss Adjusters, Solapur, in his Preliminary Survey Report dated 22.02.2010, has mentioned that 10 pyramids of bagasse stack in new survey No.-72/2 and 14 pyramids of bagasse stack in new survey Nos.-70 & 71/1 were burnt. These pyramids were near Vijori-Akluj road. In the site plan of the factory (page 374) of Additional Documents, plot No.71/2 is in north of plot No.72/2 and in west of plot no.72/1. According to the surveyor, the plot Nos.71/2 and 72/2 were out-side of factory premises and had not been insured place. The complainant himself has given up his claim in respect of bagasse kept on plot No.72/2. The plot No.71/2 also cannot be treated as inside the factory premises which is in west of plot No.72/1 and in north of plot No.72/2. From the aforesaid discussion, it is proved that the Insured has grossly misrepresented his claim. Although the burnt bagasse were not stacked at the insured place but the claim was set up, for it.

The Insurer vide letter dated 03.01.2012, gave an opportunity to the Insured to submit his explanation but he did not submit any explanation, as such, the claim was repudiated vide letter dated 22.02.2012. Before this Commission also no reliable explanation has been given. There is no deficiency in service on their part of the Insurer and the complaint is liable to be dismissed.

ORDER

In view of the aforesaid discussions, the complaint is dismissed.