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Judgment
THE complainant is a small-scale industry and is recognized as such by the Industries Department. THE complainant has taken the policy covering flood and cyclone risk for all items except 5 and 6 during the period from 8.1.1989 to 7.1.1990 on payment of required premium of Rs. 5,378/-. Similarly for the year 1990-91 the complainant has paid a sum of Rs. 5,378/- vide Cheque No. 210611 drawn on the Bank of Baroda, Vijayawada dated 3.1.1990 and requested to renew the policy for another year commencing from 7.1.1990 to 6.1.1991. THE second opposite party though received did not issue any policy in spite of several requests.
UNFORTUNATELY the complainant suffered heavy damage due to cyclone that occurred on 9th and 10th May, 1990. When the complainant contacted the opposite parties, they gave a Cover Note No. B/198744 dated 1.5.1990 and the complainant accordingly addressed a letter to the second opposite party about the damages that suffered by its unit and requested for assessment of damages. Accordingly, a Surveyor of the Company visited the unit, assessed the damages but expressed his inability to complete the job, as renewal policy was not available. In fact, even by 26.7.1990, the Development Officer of the first opposite party informed the complainant that the policy will be furnished after the same is released by the branch. Later, one Mr. P.M. Mohan Rao, Chartered Engineer of the Corporation visited the unit of 31.7.1990 along with the Surveyor and conducted preliminary survey. The said Chartered Engineer by his letter dated 9.8.1990 stated that for want of information and documents called for, further progress could not be made for assessing compensation. Inspite of several letters addressed by the complainant right from 11.5.1990 until November, 1991, the opposite parties failed to furnish the policy. However, the renewal policy was sent only on 15th February, 1991 deleting the coverage of flood and cyclone in the policy. Though a sum of Rs. 5,378/- was received, only a sum of Rs. 5,315/- was recorded as total premium paid and the balance was neither returned nor shown on other purpose. Further to adjust the amount of Rs. 5,315/- the opposite parties have included earthquake under the cover. Though Cover Note 198744 was given, in the policy cover note number was differently given i.e. 193744. All these discrepancies are made only to cover their deficiency and finally, by their letter dated 5.3.1991 informed the complainant that its claim has been repudiated. Hence the complainant claimed Rs. 6,89,347.10 ps. with interest at 12% from 10.5.1990 to 30.4.1993.
In the counter filed by the Legal Officer on behalf of the opposite parties it is stated that it is the duty of the complainant to obtain the policy and it cannot blame the opposite parties. The complainant has not obtained insurance coverage for floods and cyclone. The opposite parties have rightly repudiated the claim under letter dated 5.3.1991, as the policy obtained by the complainant does not cover the risk of flood and cyclone. It is further stated that they have thoroughly investigated into the matter and they came to know that the policy does not cover the alleged damage of the complainant for floods and cyclone as requested under their letter dated 18.9.1987 for sall items. While as the complainant under its letter dated 27.8.1990 addressed to the Surveyor mentioned that they never wanted flood and cyclone cover for stock in open and foam except items 5 and 6, which amounts to misrepresentation of facts before the Surveyor. The complainant never raised any objection including the risk covering flood and cyclone before 9.5.1990. For all these reasons, they pray that the complaint may be dismissed.
THE complainant examined himself as P.W. 1 besides marking Exs. A1 to A37 while as the opposite parties examined none but maked Exs. B1 to B4. The point for consideration is whether the policy covers flood and cyclone, and if so, to what relief the complainant is entitled ?
THE complainant is a registered Company under small-scale unit. It has taken a policy during the year 1989-90 covering flood and cyclone. THEse are not disputed, as there is no denial in the counter. However, it is stated by the opposite parties that the complainant in its letter dated 18.9.1987 marked as Ex. B3 requested to delete flood cover for all items. P.W. 1 also admitted in his evidence about the issuance of the said eltter. But he says that it is only for the year 1987-88 only. He further says that there is no specific reference in respect of the year under Ex. B3 and according to him it refers to the year 1987 only. THEre is no evidence indicating a different intention when the letter was given on 18.9.1987. It refers only to the policy that was in force at that time. THErefore, a letter Ex. B3 has reference to the policy for the year 1987-88. P.W. 1 has rightly in our view explained the position and, therefore, in the absence of any other evidence, we accept the contention that the letter refers to the policy which was in existence at that time and not to future years as contended by the opposite parties. In fact, there cannot be any reference to future policies, which were not in existence at the time of Ex. B3. Therefore, the question that falls for consideration is whether the complainant has paid premium of Rs. 5,378/- through Cheque No. 210611 dated 3.1.1990 drawn on Bank of Baroda, Vijayawada, which fact is not denied by the opposite parties, covers the risk of flood and cyclone. Ex. A3 is the covering letter enclosing the said cheque. This letter was addressed to the second opposite party requested him to renew the policy for a further period of one year from 8.1.1990 to 7.1.1991. It is admitted that the amount was received but no cover note was issued as expected. Nearly after four months i.e. on 9th and 10th of May, 1990 unprecedented cyclone hit the coast causing heavy damage in coastal districts of Andhra Pradesh including Krishna District where the complainant''s unit was located. Immediately, on 11.5.1990 the complainant addressed a letter to the second opposite party under Ex. A4 stating that the factory main building and all the A.C. sheets, motors and starters etc. were damaged. As per the Cover Note B/198744 dated 5.1.1990, the loss was covered and as such a request was made to depute a Surveyor to assess the damage immediately. Accordingly a Surveyor was deputed who asked for production of the policy. So, the complainant again addressed a letter on 28.5.1990 under Ex. A5 stating that except the Cover Notes C-11-00686 and 198744 dated 5.1.1990 as given by them, it has not received any policy. Therefore, it requested the second opposite party to send the policy with a copy to Mr. Ch. Ajay Kumar, Development Officer. Thereafter, numbers of letters were written, references were made under Exs. A6, A10, A11 and A24 but the policy was not sent. In fact Ex. A24 shows 12 references, most of them relate to their request for furnishing the policy. It is unimaginable why the opposite parties should shirk to furnish the policy for which premium was paid as long back as on 5.1.1990. There is no whisper in the counter filed by the opposite parties about their apathy or callousness to furnish the policy, more so, when a claim is pending with reference to the said policy. Perhaps, the opposite parties never realized that it is the property of the complainant and, therefore, they are bound to issue the same and they have no right to withhold the policy. However, the Development Officer of the second opposite party addressed a letter on 26.9.1990 under Ex. A12 stating that the matter has been referred to the Branch Manager and the Divisional Manager and as and when the policy is released in Branch Office, he will hand over the same to him immediately. Thereafter, he too became helpless. Be that as it may, the specific case of the complainant is that it has insurance coverage for flood and cyclone during the year 1989-90 under the earlier policy as per the complaint, which is not denied. An amount of Rs. 5,378/- was paid even during the year 1989-90. Therefore, the contention of the complainant is that as the same amount of Rs. 5,378/- paid for the year 1990-91 and requested through their letter Ex. A3 to renew the policy for a further period of one year from 8.1.1990 to 7.1.1991. Since accepted without demur, it clearly shows that the policy was renewed under the same terms and conditions as before and accordingly, both flood and cyclone were included. For this there is no denial in the counter filed by the opposite parties except stating that the complainant wrote Ex. B34 letter dated 18.9.1997 deleting the coverage of floods etc. As already seen, Ex. B3 cannot have any reference to the policy for the year 1990-91. Therefore, we are constrained to hold that the policy was taken for the year 1990-91 including flood and cyclone. This view of ours gets support from the following circumstances.
THE opposite parties have finally issued paid-up policy showing the premium amount of Rs. 5,315/-. THEre is no basis why Rs. 5,315/- was shown in the policy while in fact a sum of Rs. 5,378/- was received by them. THEre is no explanation as to what happened for the balance of Rs. 63/-. THEre is also no proof that the said amount was ever returned to the complainant at any point of time. It was infact not even pleaded that it was returned or refunded. Further, the risk of earthquake was also included in the policy, which was never asked by the complainant. THErefore, as contended rightly, in our view, this suggests that with a view to adjust the amount after the cyclone has occurred this earthquake was included in the policy, while infact the risk of earthquake was never sought for by the complainant. As already seen, the letter Ex. A3 dated 3.1.1990 clearly shows that the complainant merely requested for renewal of the earlier policy for a further period of one year from 8.1.1990 to 7.1.1991. THEre is no proof that the complainant has asked for inclusion of earthquake peril and exclusion of flood and cyclone. Even the cover note number was changed and shown in the policy as 193744 whereas the cover note number 198744 was being referred to by the complainant consistently in all the earlier correspondence. If there was a mistake in mentioning the cover note number as 198744 the opposite parties would have corrected the same in their correspondence. But there was no attempt to correct the cover note number. As such we cannot brush aside the contention of the complainant that the policy was prepared after the visit of cyclone devastating the place on 9/10.5.1990. From the above discussion, it follows that there was insurance cover note for flood and cyclone perils also and as such the repudiation of the claim by the opposite parties under Ex. A20 is unjust and illegal. Accordingly, we are constrained to hold that there is deficiency in service on the part of the opposite parties.
THE next question is what is the quantum of damages, the complainant suffered. THE opposite parties have filed Ex. B1, the survey report dated 5.8.1990. THE survey was conducted by Chartered Engineer in the presence of Mr. V.V. Reddy, who conducted preliminary survey. In this report it is clearly observed that earthquake was incorporated which was not in existence in the previous policies and flood and cyclone was deleted which was in existence in the earlier policies. Further, it is stated that though the regional office conveyed to him that the insured had issued a letter requesting policy to issue covering perils like cyclone and flood. As per the policy there was no such evidence forthcoming. Finally, he came to the conclusion that a sum of Rs. 2,52,575/- is net payable, the break-up of which is as follows : (i) Buildings Rs. 47,966.00 (ii) Plant and Machinery Rs. 83,211.00 (iii) Furniture and fittings Nil (iv) Stock Rs. 1,22,398.00 Net payable Rs. 2,52,575.00 A final report could not be submitted, as the policy itself was not furnished by the opposite parties. As such we are of the view that the amount of Rs. 2,52,575.00 arrived at by the Chartered Engineer is reasonable and, therefore, the sum can be accepted, as nothing was suggested to affect the veracity of the said report. Accordingly, there shall be a direction to the opposite parties to pay a sum of Rs. 2,52,575.00 with interest at 12% p.a. from the date of Ex. A20 dated 5.3.1991 till the date of realization. THE C.D., therefore, is liable to be allowed to this extent. In the result, the complaint is allowed partly directing the opposite parties to pay a sum of Rs. 2,52,575.00 with interest at 12% p.a. from 5.3.1991 the date of Ex. A20 till the date of realization with costs of Rs. 5,000/-. Time for payment six weeks. Complaint partly allowed with costs.