BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD.
CC 16 of 2011
Between:
M/s. Vantage Infrastructure Pvt. Ltd.
D.No. 11-13-872/2
Road No. 2/A/2
Green Hills Colony, LB Nagar
Hyderabad
Rep. by its Managing Director *** Complainant
And
1) ICICI Lombard General Insurance Company Ltd.
3rd Floor, D.No. 6-3-352/1
Osman Plaza
Road No. 1, Banjara Hills
Hyderabad.
Rep. by is Manager
2) ICICI Lombard General Insurance Company Ltd.
Regd. Office : ICICI Bank Towers
Bandra, Kurla Complex
Bandra (East), Mumbai
Rep. by its Managing Director. *** Opposite Parties
Counsel for the Complainant: M/s. V. Gourishankar Rao
Counsel for the Opposite Party: M/s. S. Shravan Kumar
CORAM:
HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT
&
SMT. M. SHREESHA, MEMBER
MONDAY, THE FOURTH DAY OF JUNE TWO THOUSAND TWELVE
ORAL ORDER: (Per Hon’ble Sri Justice D. Appa Rao, President)
***
1) This is a complaint filed u/s 17 of the Consumer Protection Act claiming Rs. 29,06,083/- towards damage to the excavator together with interest @ 15% p.a., besides compensation of Rs. 1 lakhs and costs of Rs. 25,000/-.
2) The case of the complainant in brief is that it has taken contract work for laying Outer Ring Road at Ranchi city got the excavator insured with the opposite party insurance company for a sum of Rs. 40 lakhs covering the period from 5.3.2010 to 4.3.2011. While so on 27.6.2010 at about 8 p.m. when the operator of the machine went for taking dinner at the camp site there was heavy rain with thunders and lightening and the workers were waiting at the camp. At about 10.00 p.m. the excavator caught fire and burnt. Immediately they rushed to the spot, put all the slurry, mud and soil on the machine and controlled the fire. The site engineer gave a complaint to the police which was entered in the dairy at 525/2010 dt. 28.6.2010. Immediately it has informed the insurance company which appointed M/s. Cunningham Lindsey International Pvt. Ltd. A surveyor was deputed to inspect the damage to the excavator. They have entrusted the damaged excavator to the repairer which estimated at Rs. 21,81,514/- besides Rs. 7 lakhs towards repair of engine, and Rs. 3,50,000/- towards repair of valve bank totalling to Rs. 10,50,000/- in all Rs. 32,51,514/-. M/s. L&T Company issued three quotations to a tune of Rs. 29,06,083/-. When the said fact was informed along with quotations, bills etc., the insurance company repudiated the claim on the ground that it was due to electrical breakdown not covered by terms of the policy. Assailing the repudiation it has filed the complaint claiming Rs. 29,06,083/- towards damage to the excavator together with interest @ 15% p.a., besides compensation of Rs. 1 lakh and costs of Rs. 25,000/-.
3) The insurance company resisted the case. It has filed its counter alleging that the matter cannot be decided summarily as it requires elaborate evidence. It was not liable for the loss caused to the excavator as it was excluded from the terms and conditions of the policy. The surveyor appointed by it had visited the site and found that the excavator was in a burnt condition and that the fire did not ravel beyond as it was extinguished using soil etc. Basing on the quotations the surveyor assessed the loss at Rs. 7 lakhs. Since the depreciation was not warranted as the policy is on re-instatement value basis, however, deducted salvage value @ 2.5% viz., Rs. 38,485/- and assessed finally at Rs. 15,00,922/-. He also observed that the present cost of the excavator was around Rs. 46,12,746/- and that the property was under insured by 13.28% after adjusting the loss he calculated the net loss at Rs. 11,76,000/-. The surveyor ultimately mentioned that it was due to short-circuit i.e., electrical breakdown resulted in fire. It falls under exception (b) of the policy. It was excluded by terms and conditions of the policy.
Therefore it prayed for dismissal of the complaint with costs.
4) The complainant in proof of its case filed the affidavit evidence of its Managing Director and got Exs. A1 to A17 marked while refuting his evidence the insurance company filed the affidavit evidence of the legal manager and got Exs. B1 to B4 marked.
5) The points that arise for consideration are :
i)
ii) Whether the complainant is entitled to any amount? If so, to what amount?
iii) To what relief?
6) It is an undisputed fact that the complainant a construction company insured the excavator covering the period from 5.3.2010 to 4.3.2011 for Rs. 40 lakhs. While the excavator was being used for laying of Outer Ring Road at Ranchi city, the excavator caught fire on 27.6.2010 at about 10.00 p.m. and a portion of it burnt.
7) The complainant alleges that on the said day there was heavy rain with lightning and thunder due to which the excavator caught fire. On seeing it immediately the workmen doused the fire throwing mud water. While insurance company alleges that the fire in the excavator was due to short circuit. It was confined to engine and not due to any external intervention like thunders, lightning etc. The complainant in order to prove that there was heavy rain and also thunders due to which the excavator caught fire filed a report issued by the site engineer Mr. Venkata Ram Reddy to Tapudana Police Station marked as Ex. A3. He categorically stated that “ After finishing the work at 8.00 p.m. the machine operator with his helper Mohd. Nasiruddin went to take their dinner. Soon after it started raining heavily and there was thunder and lightning. Due to lightning the machine caught fire. It took half an hour to douse the fire. Due to this fire the L&T Komatsu poclain , hydraulic pump, engine, central joint, diesel pipe, lubricant pipe, hydraulic pipe got badly damaged.” The investigating officer in his report Ex. A5 after inspecting the incident however observed that “during inspection no combustible material was found near the vehicle which could cause fire which could prove that someone might have brought the combustible material and started the fire. On inspecting the machine (vehicle) the engine was burnt though a great deal of earth (soil) was thrown on the vehicle. Therefore, no conclusion could be drawn as to whether the fire started from inside the engine or from outside. However, he opined “during investigation Sri Chaitanya KCC Reddy, Mechanical in-charge of GKC Company on being questioned about the cause of fire in the vehicle, explained that the above poclain machine contains electronic systems inside it, and it is possible that due to situations like striking of lightning, sparks can fly due to which inside the engine where the diesel flows in, it can catch fire. He also submitted a written report on these lines. The above facts support the argument that on 27.6.2010 the poclain machine of the applicant caught fire due to lightning and mechanical fault in the internal system”.
8) It may be stated herein that the insurance company on receipt of representation from the complainant appointed M/s. Cunningham Lindsey International Pvt. Ltd., surveyors and loss assessors. The complainant also submitted quotations issued by M/s. Waliram Taneja Mines P. Ltd., where they made details of calculations of repairs. They mentioned the total cost of the repairs would be Rs. 21,81,514/- so also the quotations issued by M/s. L&T for an amount of Rs. 7,45,682/- towards engine repair, Rs. 4,55,538/- towards main valve repair and Rs. 4,81,772/- towards main hydraulic pump repair in all Rs. 16,82,994/-.
9) The insurance company appointed M/s. Cunningham & Lindsey, surveyors and loss assessors. They submitted their report Ex. B2 dt. 22.9.2011 for the accident that said to have taken place in June, 2010. It reads as final report. The preliminary report that said to have submitted was not filed for the reasons best known to the insurance company. While admitting that there was damage to the engine together with associated fittings, it mentioned under the heading:
Nature & extent of damage
“Engine together with its associated fittings viz., main valve bank, and main hydraulic pump assembly of the subject L&T Komatsu PC 200 excavator suffered severe damage.”
Circumstances of loss :
“The subject excavator of the insured was in operation at the ORR project of GKC projects at Ranchi since Jan, 2010. As reported by the insured, on Sunday the 27th June, 2010 at about 8 p.m. the operator of the machine went for the dinner at a camp situated just by the project site leaving the excavator there. During the project period, it started raining heavily with thunder storm. The project workers were waiting at the camp for the rain to stop and next shift to begin from 10 p.m. Suddenly they noticed the subject excavator was burning. They immediately rushed to the spot and put all the shurry mud and soil on the machine and controlled the fire.”
However without examining either that of the police or any of the workers opined that the damage was due to electrical breakdown. Without substantiating as to how it could come to such an opinion, more so, in the light of investigation report and also that of the workers at the spot. It did not rule out raining on the said day nor thunder storm etc. It ought to have examined the engineer to show that short-circuit could be caused as a result of fire inside as alleged in its counter. When the surveyor did not find the evidence let in by the complainant was false, and no reasonable explanation was forthcoming as to how there could be short circuit resulted in fire inside , and in the light of version of the complainant it ought to have accepted that short-circuit was due to thunder storm. The contention that there was no eye witness to the incident has no meaning. The employees as well as engineer at the site when found that there was thunder storm and immediately saw the excavator burnt, one can easily conclude the reason for such incident. It is all reasonable cause of incident, more so, when the opposite party could not examine any engineer to state under what circumstances such a short circuit could be caused in the engine without any external agency. In the light of positive evidence let in by the complainant, we are of the opinion that excavator was damaged due to thunder storm, lightning and not excluded from the terms and conditions of the policy. Therefore, we are of the opinion that the opposite parties are liable to pay compensation.
10) Coming to the question of compensation the complainant has sought for quotations from M/s. Waliram Taneja Mines P. Ltd. They issued quotation for engine at Rs. 7 lakhs and valve bank at Rs. 3,50,000/- and Rs. 21,81,514/-. However, it had issued three receipts payable for Rs. 29,06,083/. The very surveyor appointed by the insurance company assessed the damage at Rs. 15,00,922/- after considering the quotations issued by L&T for Rs. 16,82,994/- by deducting the salvage value at 2.5% on the damaged parts. A perusal of Ex. A1 policy shows policy excess would be Rs. 2,50,000/- for claims arising against AOG perils and Rs. 1,25,000/- against non-AOG perils. This is undoubtedly an AOG peril. Taking Rs. 25 lakhs as insured declared value and if quotations issued by L&T are taken it would come to Rs. 16,82,994/- and if 2% towards salvage value on spare parts is deducted it would come to Rs. 15,00,922/-. It would be reasonable as assessed by the surveyor which was not disputed. We are of the opinion that a sum of Rs. 15,00,922/- after deducting salvage value could be reasonable and modest.
11) In the result the complaint is allowed in part directing the insurance company to pay Rs. 15,00,992/- with interest @ 9% p.a., from the date of complaint viz., from 17.2.2011 till the date of realization together with costs of Rs. 20,000/-. Time for compliance four weeks.
READ
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
04/06/2012
*pnr
