Orissa

StateCommission

A/87/2020

Oriental Insurance Co. Ltd - Complainant(s)

Versus

Baidhar Muduli Cold Storage - Opp.Party(s)

M/S A.A.Khan & Assctes

15 Sep 2022

ORDER

       Heard learned counsel for both sides.

2.     Here is an appeal filed u/s 15 of the erstwhile Consumer Protection Act, 1986 (hereinafter called the ‘Act’). Parties to this appeal shall be referred to with reference to their respective status before the District Forum.

3.   The case of the complainant in nutshell is that the complainant has set up a cold storage and he has insured the said cold storage with OP Nos. 1 and 2 by purchasing “Standard Fire and Special Perils” insurance policy which covered for the period from 20.10.2017 to 19.10.2018. On 2.10.2018 at about 10 AM, there was outbreak of fire  due to electrical  short circuit in the cold storage premises of the complainant. After occurrence, it was informed to the OPs who deputed surveyor. After due survey the surveyor reported that the complainant is not entitled towards the damage of storage machinery and consequential damages amounting to Rs.26,00,000/- because of the  exclusion clause in the policy. Therefore, the OPs repudiated the claim as “No Claim”. Challenging the same, the complaint was filed.

4.     OP Nos. 1 and 2 filed written version stating that  they have insured the cold storage, machineries and its parts but not the stock of  the cold storage. They further submitted that they have sent the surveyor who has computed the loss and found due to short circuit the fire occurred. Since the damage caused comes under the exclusion clause, the insurer repudiated the claim. Therefore, they have no any deficiency in service and not liable to indemnify the loss.

5.     OP No.3 the financer submitted that they have financed the complainant but nothing to do with regard to the claim made with the insurer for the loss sustained due to fire incident. OP No.3 further stated that they have intimated the matter to the insurer. So, they have no any deficiency in service.

 6.    Learned District Forum after hearing both parties

passed the following order:-

                        “xxx   xxx   xxx

In the result, the complaint be and the same is allowed against the OP No.1 & 2 with cost and compensation and dismissed against OP No.3. OP No.1 & 2 are directed to settle the claim of Rs.9,32,800/- for damage of compressor & other machineries including installation of compressor of the cold storage as assessed by the technical farm and to pay a sum of Rs.6,00,000/- towards consequential damages. The said OPs are also directed to pay a sum of Rs.10,000/- as compensation for mental agony and harassment and Rs.4,000/- towards cost of litigation. This order must be complied within 30 days from the date of receipt of this order failing which interest will be charged @ 7% P.A. on the aforesaid amount from the date of claim till the date of payment.”

7.     Learned counsel for the appellants – insurer  submitted that the learned District Forum has failed to consider the written version with proper perspectives According  to him, there reveals  from the policy that it was issued for covering cold storage premises,  plant and machineries but it has not covered  the stocks of the cold storage. Since the property was damaged due to electrical short circuit, clause – 7 of the exclusion does not allow to indemnify such type of damages. As expressed by the surveyor they are not liable to pay compensation to the complainant. This aspect has been over looked by the learned District Forum. He also referred to the surveyor’s report and the Assistant Fire Officer. The Assistant Fire Officer, Bhadrak  opined that  the claim of the complainant is genuine but ignored by the insurer in view of report of surveyor. As such, non-settlement of claim by the insurer does not amount to deficiency in service. Therefore, impugned order should be set aside by allowing the appeal.

8.     Learned counsel for the Banker submits that there is no order passed against it. However, learned counsel for the complainant submitted that since the entire plant and machineries were damaged, it affected the stocks. Even if the stocks were not insured, but the cold storage was insured and as such, they are entitled to the insured amount. He submitted that the surveyor came to spot two months after the incident. Therefore, he submitted that the surveyor’s report should not be accepted. Since the report of the Assistant Director, Factories and Boilers and Assistant Fire Officer, Bhadrak go to show that the claim of the complainant is a genuine one learned District Forum rightly followed it. He also submitted that the learned District Forum has rightly assessed the loss and same should be confirmed.

9.     Considered the submission of learned counsel for    the  respective parties and perused the DFR including the impugned order.

10.   It is admitted fact that  the cold storage premises have been insured with the OP insurer. It is also not in dispute that during currency of the policy there is fire  damaged to the cold storage. The surveyor was deputed  but he repudiated the claim. The only question arises whether the report of the surveyor is to be acceptable to find out losses or the report of the Assistant Fire Officer, Bhadrak. The surveyor is not an Electrical Engineer. Moreover, clause – 7 of the insurance policy is clear to show that loss due to destruction or damage to any electrical machine, fixture or fitting arising from or occasioned by over running, excessive pressure, short circuiting, self heating or leakage of electricity from whatever cause (lighting included) provided that his exclusion shall apply only to the particular electrical  machine, apparatus, fixture or filling so affected and not to other machines, apparatus, fixtures or fittings which may be destroyed or damaged but fire so set up.  So the contention that the loss was covered under the policy. Here, the report of the surveyor made after two months as revealed but immediately report is made available from the Assistant Fire Officer and Assistant Director of Factories and Boilers showing cause of fire due to short circuit. Therefore, it is a clear case that due to short circuit of electricity the fire occurred to the building and the properties like plant and machineries of the cold storage were destroyed.

11.   So far computation of loss is concerned, the surveyor’s report is totally silent as to the amount of loss. It is revealed that  the technical firm has assessed the loss  at Rs.9,32,800/- towards damage of compressor and other machineries including installation of compressor of the cold storage. We are not inclined  to give Rs.6,00,000/- to the complainant towards consequential damages because stock is not insured.

12.   In view of above discussion, while confirming the impugned order of the learned District Forum, we modify the impugned order by directing the appellant for payment of Rs.9,32,800/- to the complainant,  the portion of impugned order to pay a sum of Rs.6,00,000/- towards consequential damages for fire is set aside. The amount be paid within 45 days from today failing which the amount shall carry interest at the rate of 12% per annum from the date of impugned order till the date of payment.

13.   The appeal is allowed in part. No cost.

           DFR be sent back forthwith.

Supply free copy of this order to the respective parties or the copy of this order be downloaded from Confonet or Website of this Commission to treat same as copy supplied from this Commission.