DISTRICT CONSUMER DISPUTES REDRESSAL FORUM: BHADRAK
Dated the 23rd day of July, 2020
C.D Case No. 72 of 2019
Present 1. Shri Raghunath Kar, President
2. Shri Basanta Kumar Mallick, Member
3. Afsara Begum, Member
M/S Baidhar Muduli Cold Storage
Represented by its Proprietor
Sri Trilochan Muduli
S/o Baidhar Muduli
At: Rukunadeipur,
Ps: Padampur, Via: Ertal,
Ps: Basudevpur,
Dist: Bhadrak, Odisha
……………………. Complainant
(Versus)
1. Branch Manager, Oriental Insurance Company Ltd.
At: Main Road, Burma By-Pass, Bhadrak
Po/Ps/Dist: Bhadrak
2. Divisional Manager, Oriental insurance Company Ltd.
At: Police Line, Blasore
Po/Ps/Dist: Balasore
3. Branch Manager, State Bank of India, Basudevpur Branch
At/Po/Ps: Basudevpur,
Dist: Bhadrak
……………………..Opp. Parties
Counsel For Complainant: Sri S. P. Mohanty, Adv
Counsel For the O.Ps No. 1 & 2: Sri A. K. Panda, Adv
Counsel For the O.Ps No. 3: Sri Jaminikanta Nayak, Adv
Date of hearing: 08.07.2020
Date of order: 23.07.2020
RAGHUNATH KAR, PRESIDENT
This dispute arises out of a complaint filed by the complainant alleging deficiency of service and unfair trade practice against the O.Ps.
The facts of the case as narrated in the complaint are to the effect that the complainant is a young entrepreneur who has setup a cold storage with the credit support of OP No. 3 to earn his livelihood. The said cold storage has been insured for “STANDARD FIRE & SPECIAL PERILS” with OP No. 1 & 2 (Insurer) on payment of the required premium of Rs 8,338/- on dt. 20.10.2017 vide policy No. 2018/312 which was effective up to 19.10.2018 for a sum assured of Rs 26,00,000/-. To his ill luck, on 02.10.2018 at about 10 AM the fittings including compressor section of the cold storage of complainant were burnt due to electrical short circuit as a result of which the cold storage became defunct and consequently the perishable goods such as fish & vegetables etc. stored in the chiller chamber worth of more than Rs 12,00,000/- were decomposed. The complainant immediately informed all concerned O.Ps verbally over phone and also informed the fire brigade officer at Basudevpur including Asst. Director Factories & Boiler Balasore in writing on 06.10.2018. OP No. 1, being well informed, did not appoint any surveyor for a couple of months to assess the damage caused due to short circuit and after two months OP No. 2 deputed a person namely Sri Manoj Mohapatra who, claimed to be the surveyor and loss assessor, visited the cold storage and assessed loss. Once again after three months OP No. 1 appointed another person Sri S. S. Jena as surveyor and loss assessor to assess the loss. At the time of assessment the complainant has furnished all required documents pertaining to loss caused due to short circuit where the surveyor assured to settle the claim to the extent of actual loss. But with heavy heart it is expressed that the insurer has not yet settled the claim. Due to constraint of funds the complainant could not repair the plant and machinery as a result the said cold store remained defunct till date and could not generate any income for repayment of loan installments. Persistently the complainant personally contacted the OP No. 1 to settle the claim to make the unit functioning but failed to yield any positive result and being aggrieved, served a notice upon O.Ps to settle the claim failing which he would take shelter in appropriate Court to get justice. But the O.Ps did not pay any heed to the grievance of the complainant and remained silent for a prolonged period. It is also stated by the complainant that due to irresponsive attitude of the O.Ps the matter could not be resolved over a period of time for which the complainant took shelter in this Forum specifically praying for settlement of claim along with cost and compensation.
OP No. 1 & 2 resisted the contentions of the complainant and contested the case. In the written version submitted by the OP No. 1 & 2 challenged the complaint on the ground of maintainability due to lack of jurisdiction and suppression of the facts and also cited some decision of Hon’ble Apex Court that the insurance policy is to be construed strictly as per terms and conditions of policy. The insurance being a legal contact between the policy holder and insurance company both the parties are governed by the terms and conditions mentioned in the policy. OP No. 1 & 2 objected in stating that after survey conducted by the independent surveyor-cum-loss assessor deputed by OP No. 1 & 2 it is reported that there is no sign of visible spreading up of fire causing damage to the compressor and nearby fan blower unit. Further it is also stated by OP No. 1 & 2 that the complainant has not taken coverage of stock of his cold storage under the policy for standard fire and special perils. Hence the claim for consequential loss for the damage of stock in cold storage is not genuine and cannot be settled. Under the above premises the claim of the complainant has already been settled as “No Claim” and also intimated to the complainant on 20.08.2019. Further the O.Ps contented in stating that the complainant caused inordinate delay in staking the claim as a result of which the insurer deputed the surveyor was delayed. It is pertinent to mention here that Sri Manoj Mohapatra was a penal investigator of OP No. 2 who is no more working with the O.Ps. The augmentation of loss claimed by the complainant for consequential damage is not just and proper as in the present case only the compressor fan blower terminal cable is damaged due to short circuit. It is categorically mentioned in the policy condition as per exclusion No. 7 of the issued standard fire and special perils policy which reads as “Loss destruction of damage to any electrical machine, fixture or fitting arising from or occasioned by over running, excessive pressure, short circuiting, arcing, 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 damage by fire so set up”. Hence the loss of compressor and other losses is not payable under the terms of the policy and the complainant is not entitled to get Rs 26,00,000/- (sum insured) towards damage of storage machinery and consequential damages. In view of above submission the complaint is bereft of merit and liable to be dismissed.
OP No. 3 in submitting written version has stated that this dispute is not maintainable in present Forum as it has not caused any deficiency of service and therefore the petition is liable to be dismissed. The present OP is the financier of the project and has nothing to do with regards to the claim staked with insurer for augmentation of loss caused due to short circuit. It is also not a fact that the complainant has intimated the answering OP about the incident on 02.10.2018 and about the stock of fish in the storage. Hence the present OP is an unnecessary party to this case for which this case is liable to be dismissed against the answering OP filed in present Forum.
Heard the complainant and O.Ps, perused the material evidences on record and observed that the following points are very much essential to be discussed to arrive at the conclusion.
Evidently the complainant is the insured under the insurer on payment of required premium against the policy bearing No. 2018/312 which was valid for the period from 20.10.2017 to 19.10.2018. During the currency of the policy, due to short circuit and outbreak of fire resulted in damaging the entire freezing system and consequentially the perishable items stored in the freezing chamber worth of Rs 12,00,000/- approximately were damaged. In addition to above damage the compressor including other fittings were damaged due to short circuit.
1. The complainant submitted in course of hearing that due to outbreak of fire the compressor went out of order and other fittings & fixtures also became defunct. Immediately the complainant intimated the incident to the insurer and the banker requesting an early spot visit which was not responded by the O.Ps. The complainant being worried enough persistently contacted the insurer (OP No. 1 & 2) over phone but did not yield any result after expiry of nearly two months one surveyor named as Manoj Mohapatra was deputed to the cold storage site for loss assessment who completed his task and received the relevant papers from the complainant. Once again the insurer deputed another person named as Sri S. S. Jena, surveyor and loss assessor after a period of three months from the date the earlier investigator-cum-surveyor conducted survey. Despite repeated requests the insurer did not settle the claim on some false ground and till the date of filing of this case. On the contrary the O.Ps contented that the fact of short circuit is true but the damage caused due to short circuit is limited to the extent of causing damage to the pipe line only. The claim of the complainant as to the damage has been caused due to short circuit is purely false as per report of Sri S. S. Jena, surveyor-cum-loss assessor. In challenging the contentions of OP No. 1 & 2 the complainant once again argued that the Asset. Fire Officer has verified the factory premises and submitted a report on dt. 25.10.2018 specifying that the compressor, five numbers of indoor and outdoor fans and stock of 40 quintals of Hilsa fish has been badly damaged and the verification report of Asst. Director of Factories and Boilers issued on dt. 06.11.2018 discloses that the damage has been caused due to outbreak of fire damaging the entire freezing system including the stock of fish already was in storage.
Heard the parties of the present case and perused the evidence materials like the estimate given by Arctic Refrigeration Pvt. Ltd. which shows that to rectify the damage of compressor and other machineries, an amount of Rs 11,66,000/- is required to be spent including installation charges need to be compensated by the insurer. The report submitted by the Asset. Director Factories & Boilers and report of Asst. Fire Officer, Bhadrak makes clear that the claim of the complainant is genuine which cannot be ignored by the insurer and non-settlement of claim by the insurer amounts to deficiency of service. Hence the objections raised by OP No. 1 & 2 are not sustainable.
2. During hearing the complainant submitted that due to short circuit and defunct of compressor and freezing chamber, the stock of fish in storage worth of Rs 12,00,000/- approximately was decomposed and was not in a condition to sale the stock in the open market for the reason that the owners of the fish in stock took two days more time to take delivery of their fish in stock. Such accommodation of storage was given to the fish traders on rental basis by the owner of the cold storage on a condition any damage to be caused for whatever reason, the owner of the cold storage shall be responsible and liable to pay. Due to failure of freezing system consequent upon the damage of compressor and other machineries the entire stock in the storage were decomposed for which the owner of the cold storage is liable to pay the value of fish in the storage. Therefore the damage caused consequent upon failure of freezing system, the complainant is liable to pay. Since the OP No. 1 & 2 are liable to pay the value of damaged fish to the complainant so as to enable him to pay off the value of fish to the fish traders. In objecting the submission of complainant OP No. 1 & 2 argued that the stock in storage is not covered under the policy of standard fire and special perils which does not permit O.Ps to compensate the loss in accordance with the terms and conditions stipulated in the policy. In challenging the contentions of O.Ps the complainant argued that the stock in the trade were decomposed is the “effect” of the “”cause” outbreak of fire due to short circuit causing huge damage to the stock in trade. If it is agreed that the stock was not covered under insurance but the consequential damage occurred due to defunct of compressor consequentially the freezing temperature required would not be maintained which is not at all a fault of complainant. Therefore the OP No. 1 & 2 are running away from the genuine reason of damage and taking false plea to ignore the claim. To substantiate the above argument complainant has furnished a decision of National Commission in Appeal Case No. 894 & 895 of 2006 pronounced on 10.02.2012 between New India Assurance Company Ltd. Vs M/s Dani Mourdhwaj Cold Storage Pvt. Ltd. the Hon’ble National Commission has held that whatever may the cause of incidence, the consequential damage caused to the assets is to be compensated by the insurer as the complainant/petitioner/respondent has suffered from financial loss. Further the complainant has furnished another decision of State C.D.R. Commission, West Bangel pronounced on 31.03.2015 in a case between M/s Indrasen Shamlal Pvt. Ltd. Vs The Oriental Insurance Company Ltd. in which it is held by the Hon’ble State Commission that the insurer is bound to augment the consequential loss. In another case the Hon’ble National Commission in Revision Petition No. 2082 of 2008 arising out of Appeal No. 222/2008 decided on 20.02.2009 wherein it is held that the consequential damage must be compensated by the insurer. In view of the above decision this Forum is of opinion that the stock in the trade/cold storage, even not covered under insurance has been damaged due to outbreak of fire for the reason of short circuit damaging the freezing system including compressor.
The argument of the complainant with regards to consequential damages cannot be ignored and the O.Ps have no escape other than to shoulder the liability of the consequential damages caused due to short circuit and defunct of compressor and other machineries. In view of the argument of the complainant and counter argument of OP No. 1 & 2 with regards to consequential damage, this Forum is of the opinion that the said O.Ps are liable to pay the value of the stock as compensation so as to enable the complainant to pay off the dues of fish traders.
3. The certificate issued by two responsible Govt. Officers such as Asst. Director, Factories & Boilers and Asst. Fire Officer, Bhadrak who have conducted survey soon after receipt of the intimation are of opinion that the damage to a large extent has been caused due to short circuit and their report is consistent with the claim staked by the complainant. We have no doubt on the correctness of the report of two responsible Govt. Officers and hold that the insurer is liable to compensate the loss of compressor and other machineries including installation charges and consequential damages of stock in trade.
In view of the facts as discussed above and upon perusal of material evidence on record this Forum is of opinion that OP No. 1 & 2 are liable to compensate the loss as assessed by Arctic Refrigeration Pvt. Ltd. after deduction of 20% of the claim of Rs 11,66,000/- and to settle the consequential loss on nonstandard basis i.e. 50% of the total value of fish in stock.
ORDER
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 O.Ps 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.
This order is pronounced in the open Forum on this day of 23rd July, 2020 under my hand and seal of the Forum.
