Decided on August 04,2020

Divisional Manager Bajaj Allianz General Insurance Appellant
Kohinoor Enterprises Respondents


Sanjay Dhar, J. - (1.)The instant appeal is directed against order dated 28.02.2018, passed by J &K State Consumer Disputes Redressal Commission (hereinafter referred to as "the Commission'), whereby a sum of Rs.3.80lacs along with interest @ 10% has been awarded as compensation in favour of the complainant (respondent herein)and against the insurance company (appellant herein).
(2.)The facts giving rise to the instant appeal are detailed out here-under:
(I) The respondent herein happens to be a business concern dealing with sale and storage of bananas and other fresh fruits. The said business establishment was located at Industrial Estate Zainakote, Srinagar. A policy of insurance was purchased by the respondent from the appellant to cover risk to his business up to a sum of Rs.30,00,000/ under Policy No.OG-14-1205-4001-00056088. The policy covered building, plant, machinery, cold storage and stock of bananas and was in operation from 29.03.2014 to 28.03.2015. The respondent had availed financial assistance from the Jammu and Kashmir Bank Ltd. to run his business.

(II) In September, 2014, unprecedented devastating floods took place in the Kashmir Valley, particularly in Srinagar City, which caused enormous damage to property. As a result of the unprecedented flood, electricity installations also suffered massive damage resulting in disruption in supply of electricity in whole of the Valley including the premises of the cold storage belonging to the respondent. As a consequence of this, the stock of bananas stored in the cold storage got damaged.

(III) Since the stock of the respondent lying in the cold storage was covered under the insurance policy, a claim was lodged by him with the appellant insurance company. A surveyor was deputed by the appellant insurance company to assess the loss and vide a report dt. 29.12.2014 the same was assessed at Rs.3.80lacs. However, vide a communication dated 17.04.2015, the appellant repudiated the claim of the respondent conveying the following reasons:

"Loss &/or damage caused to the stocks was due to change in temperature of cold storage following failure of electricity and not due to any insured peril under the subject policy."

(IV) The repudiation of the claim by the appellant insurance company compelled the respondent to file a complaint before the Commission. The complaint was resisted by the appellant insurance company on the ground that the loss to the stocks was caused by failure of electricity and not due to the flood which stands excluded under the terms of the policy of insurance.

(V) After hearing the parties, the Commission held that the instant case is not covered by the exclusion clause, inasmuch as the flood, which led to disruption of electric supply, was the cause of deterioration of the stocks in the cold storage of the respondent. The Commission further observed that connection between the floods and deterioration of the stocks in trade, in the instant case, was proximate. Accordingly, the Commission awarded compensation of Rs.3.80 lacs (the amount of loss assessed by the surveyor) in favour of the respondent herein and the said sum was to carry interest @10% p.a.

(3.)It has been contended in the appeal that the claim of the respondent was repudiated in terms of the "exclusion clause' contained in the policy of insurance and the same has been ignored by the Commission while passing the impugned order. It is also contended that the Commission has, without recording any evidence, passed the impugned order which is contrary to law and, as such, deserves to be set aside.

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