SHREE SHYAM COLD STORAGE Vs. NATIONAL INSURANCE CO LTD
LAWS(RAJCDRC)-2007-9-2
RAJASTHAN STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Decided on September 24,2007

Shree Shyam Cold Storage Appellant
VERSUS
NATIONAL INSURANCE CO LTD Respondents

JUDGEMENT

- (1.) THIS complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter referred to as "the Act of 1986") has been filed by the complainant against the opposite party -National Insurance Co. Ltd. on 30.6.2004 with the prayer that the opposite party be directed to pay to the complainant a sum of Rs. 26,11,627, as claim amount, as assessed by the Surveyor for the loss of stock of potatoes due to fire which had taken place in the cold storage premises of the complainant on 28.5.2003, along with interest at the rate of 18% p.a. from the date of fire accident till payment was made and further, the complainant be awarded a sum of Rs. 7,50,000 towards business loss, Rs. 5,00,000 for Bank interest and standing charges and Rs. 50,000 as cost of litigation.
(2.) THE case of the complainant as put forward by him in the complaint is as follows: The complainant had taken a Fire Insurance Policy (Annex. R/1) bearing No. 370186/11/02/310513 (cover note No. JRO 0124766 Annex. 1) for Rs. 1,50,00,000 from the opposite party -National Insurance Co. Ltd. (for short "the Insurance Company") for the period from 26.3.2002 to 25.3.2004. The risk covered under the above fire Insurance policy and cover note was in the following manner: S. No. Particulars Sum insured 1. Building Rs. 70,00,000 2. Plant and Machinery Rs. 30,00,000 3. Stock (including potatoes) Rs. 50,00,000 Total : Rs. 1,50,00,000 The further case of the complainant is that on 28.5.2003 at about 7.00 p.m., the insured cold storage building of the complainant had caught fire and information of that incident of fire was immediately given by the complainant to the Fire Brigade, Jaipur and upon this, a team of fire brigade reached on the spot and fire was very severe and dreadful and it could be controlled and extinguished at about 3.00 a.m. on 29.5.2003 that too with the help of 5 -6 fire tenders, which is evident from the certificate Annexure 2 dated 7.7.2003 issued by the Commissioner, Fire, Nagar Nigam, Jaipur. The further case of the complainant is that a report about the incident of fire was also lodged by the complainant in the Police Station Sanganer, Jaipur and information of that incident of fire was also given by the complainant to the opposite party Insurance Company on 29.5.2003 and upon this, a Surveyor M/s. R.K. Singhal and Company Pvt. Ltd., New Delhi was appointed by the opposite party -Insurance Company to assess the loss suffered by the complainant. The further case of the complainant is that thereafter, the Surveyor had inspected the site several times sand all requisite information, papers and documents were made available to the Surveyor by the complainant and after considering the entire materials and evidence available on record, the Surveyor M/s. R.K. Singhal and Company Pvt. Ltd. submitted the final survey report on 1.8.2003 (Annexure 3) in which the Surveyor had assessed the loss to the tune of Rs. 27,56,384 (Rs. 1,54,757 towards building and Rs. 26,11,627 towards stock of potatoes). The further case of the complainant is that though the Surveyor had assessed the loss to the tune of Rs. 27,56,384, but the opposite party -Insurance Company had approved the claim of the complainant for Rs. 1,44,757 towards building only, but repudiated the claim for loss of stock of potatoes for Rs. 26,11,627 through letter dated 7.1.2004 (Annexure 7) in the following manner: "......This is reference to our various telephonic conversa -tion for collecting the cheque. The Competent Authority has approved the claim for Building portion of cold storage for Rs. 1,44,757 only and the claim of stock is not payable as the same is not covered under the policy. We request you to kindly sign the loss voucher to enable us to send you the cheque at the earliest..." Thereafter, the present complaint was filed with the prayers as stated above contending inter alia: (i) That the stock of potatoes lying in the cold storage of the complainant was destroyed and damaged due to fire which had taken place on 28.5.2003 and when the Surveyor, after elaborate discussion and consideration of entire materials and evidence available on record, had assessed the loss of stock of potatoes to the tune of Rs. 26,11,627, that amount should have been paid by the opposite party -Insurance Company to the complainant, especially when the stock of potatoes was insured under the fire insurance policy in question for Rs. 50,00,000 and the proximate and immediate cause of damages to the stock of potatoes was the fire which had taken place on 28.5.2003. (ii) That when the opposite party No. 1 Branch Office of Insurance Company through letter dated 5.9.2003 (Annexure 8) had recommended that the claim as assessed by the Surveyor to the tune of Rs. 27,56,384 including the loss of potatoes for Rs. 26,11,627 be approved and when the Surveyor through letter Annexure 10 dated 14.2.2004 had clarified the position on point of cause of loss that rise of temperature was directly due to fire and that fact was again reiterated by the Surveyor through letter Annexure 11 dated 6.6.2004 that cause of loss was covered under the fire insurance policy in question, therefore, in these circumstances, the opposite party -Insurance Company was not justified in repudiating the claim of the complainant for loss of potatoes for Rs. 26,11,627 and it amounted to deficiency in service on the part of the Insurance Company -opposite party. (iii) That no doubt as per proviso to Sub -section (2) of Section 64UM of the Insurance Act, the Insurance Company had a right to pay or settle any claim at any amount different from the amount assessed by the Surveyor, if cogent reasons are there, but in the present case, there existed no cogent reasons for taking a view different from the one taken by the Surveyor through final survey report Annexure 3, especially when the claim as assessed by the Surveyor was earlier recommended for approval by the opposite party -Insurance Company through letter Annexure 8. Hence, the opposite party -Insurance Company was not justified in taking a view different from the one taken by the Surveyor through final survey report Annexure 3. A reply was filed by the opposite party -Insurance Company on 4.2.2005 in which it was stated that so far as the claim of the complainant for building is concerned, the same was approved by the opposite party -Insurance Company for Rs. 1,44,757 as assessed by the Surveyor, but so far as the claim of the complainant for loss of stock of potatoes for Rs. 26,11,627, as assessed by the Surveyor, is concerned, that was not payable as it was not covered under the fire insurance policy in question and thus, the same was rightly repudiated by the opposite party -Insurance Company through Annexure 7. As a matter of fact, the following two grounds were taken by the opposite party - Insurance Company in the reply for repudiating the claim of the complainant for the loss of stock of potatoes: (i) That as per Clause 6 of general exclusions of policy in question, the policy does not cover the loss, destruction or damage to the stocks in cold storage premises caused by change of temperature. Since in the present case the damages to the stock of potatoes lying in cold storage of the complainant were caused due to change of temperature and that was not the direct result of fire, therefore, as per Clause 6 of general exclusions of the fire insurance policy in question, which reads as follow, the claim for loss of stock of potatoes was not payable and the same was rightly repudiated by the opposite party -Insurance Company throught Annexure 7: "General Exclusions his policy does not cover 1....... 2....... 3....... 4....... 5....... 6. Loss, destruction or damage to the stocks in cold storage premises caused by change of temperature." Apart from this, even the surveyor had stated in his final survey report Annexure 3 that though physically potatoes seem to be OK, but there were fair chances of damages due to higher temperature. Therefore, damages to the stock of potatoes were on account of change in temperature and that was not the direct result of the fire, which had taken place on 28.5.2003 and, thus, claim for loss of stock of potatoes was not payable under the fire insurance policy in question, in view of Clause 6 as quoted above and the same was rightly repudiated by the opposite party -Insurance Company through letter dated 7.1.2004 (Annexure 7). (ii) That so far as the report of the Surveyor dated 1.8.2003 (Annexure 3) is concerned, it was submitted by the opposite party -Insurance Company that the survey report is only recommendatory in nature and the Insurance Company has every right to independently see and analysee every case on its merits and to differ even with the survey report if cogent reasons are there on record and in this respect, a reliance was placed by the opposite party Insurance Company on proviso to Sub -section (2) of Section 64UM of the Insurance Act, 1938, which reads as under: "Provided that nothing in the sub -section shall be deemed to take away or abridge the right of the insurer to pay or settle any claim at any amount different from the amount assessed by the approved Surveyor or Loss Assessor." No doubt the Surveyor had assessed the total loss to the tune of Rs. 27,56,384, but in view of the terms and conditions of the fire insurance policy in question especially Clause 6 of general exclusions and looking to the nature of loss and looking to the above proviso, the opposite party -Insurance Company had settled the claim for loss of building only to the extent of Rs. 1,44,757 after deduction of Rs. 10,000 as per excess policy clause and the remaining claim for loss of stock of potatoes for Rs. 26,11,627 was repudiated as the same was not found covered and payable under the fire insurance policy in quetion and in doing so, no illegality or irregularity has been committed by the opposite party -Insurance Company. Hence, there was no deficiency in service on the part of the opposite party -Insurance Company in repudiating the claim of the complainant for loss of stock of potatoes and the present complaint deserves to be dismissed.
(3.) WE have heard the learned Counsel appearing for the complainant and the learned Counsel appearing for the opposite party -Insurance Company and gone through the entire materials available on record. Point No. 1 regarding cause of damages to the stock of potatoes lying in the cold storage of complainant There is no dispute on the point that apart from building and plant and machinery, the stock of cold storage of the complainant including potatoes was insured with the opposite party -Insurance Company for Rs. 50,00,000 through fire insurance policy Annexure R/1 and cover note Annexure 1 for the period from 26.3.2003 to 25.3.2004.;


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