Order-14.

Date-13/05/2015.

Complainant Crystal Roadways Pvt. Ltd. represented by its Director Murari Lal Agarwal by filing this complaint has submitted that complainant being a logistic company registered under the companies Act, and complainant took up construction of a deep freezing cold storage ware rooms in the year 2010 and the project was of the complainant and its group company, i.e. Shimla Horticulture, which comprised of construction and development of a four chamber and seven common areas for storage of items at temperature as low as -26 degree centigrade.

          Complainant persuaded the aforesaid project to be developed at Sudha Ras Food Park, Sankrail, Howrah on the land allotted by WBIDC in the year 2010 being Plot No. A-8 & A-9, Sudha Ras Food Park, Dhulagarh, Sankrail, Howrah – 711302.

          In order to construct a Global Standard State of Cold Storage facility in the state also hired technical consultant from Netherland who has the experience of building World Class Cold chain infrastructure and the complainant to the recommendation and proposal from the above referred technical consultant have entered into contract with Lloyd Insulation (India) Ltd. op no. 3 in the form of purchase orders and/or letter of intent for supply of materials and work order for erection towards completion and achievement of the projects object.

          Complainant obtained Erection All Risks storage-cum-Erection Insurance policy bearing No. 51030044130400000002 from New India Assurance Co. Ltd. for the period from 22.07.2013 to 21.01.2014 from the erection site being Plot No. A-8 & A-9, Sudha Ras Food Park, Dhulagarh, Sankrail, Howrah upon execution and payment or required premium amount vide receipt No. 51030081130000006563 dated 22.07.2013 and a policy certificate was also issued.

          The insurance coverage was towards all material damages including plant and equipments to be erected at the aforesaid project site of construction and development of cold storage warehouse being at Sudha Ras Food Park, Sankrail, Howrah. By its contractor Isoloyd Engineering Pvt. Ltd.

          That on 30.07.2013 at about 1:20 P.M. at the project site, Dulagrah, Howrah 93 nos of Insulated PuF panels fell on top of Hydra Crane and were damaged.  The incident occurred due to strong wind/storm lashed the project site at the material point of time and a considerable number of panels were completely damaged and the remaining panels were partially damaged and in addition a number of panels were hanging and moved from original place of installation due to strong wind/storm on 30.07.2013.

          Complainant informed the Insurance Co. about the loss caused due to strong Monsoon wind vide an e-mail dated 31.07.2013 and the insurance company was requested to appoint one surveyor to conduct spot survey in order to asses and estimate the loss caused by such strong Monsoon wind.  Thereafter Anjaneya Surveyors Pvt. Ltd. was appointed by the insurance company to conduct survey and to assess loss occurred at the cold storage due to strong wind/storm on 30.07.2013 and provided all papers and details of damage vide e-mail dated 13.08.2013.  Complainant provided the market price of the damaged PUF panels and flashing received from the supplier amounting to Rs. 23,61,772.70 paisa excluding erection change.  The complainant vide e-mail dated 16.08.2013 provided detail information and requirements and requested the insurance company to finalise the survey report and to send a copy of the same to the complainant.

          Surveyor submitted its report dated 25.10.2013 in respect of the survey done under the EAR.  The surveyor in the report stated that during construction there was wind with rain, the PUF panels that had been raised and the work of sealing and anchoring was going on, the panels standing loosely as was under erection process could not withstand the sudden high force of the wind which was not regular and fell being dislodged from their place of installation on to a hydra crane and also fell on the floor.  The surveyor thus admitted the damage which was caused to the panels and making them unusable.

          It is specifically mentioned in the surveyor’s report that there was reportedly a strong wind on 30.07.2013 around 1:20 P.M. when the incident occurred causing 10 numbers of 200mm PUF panels fell on the floor while some fell on Hydra Crane and 6 nos of PUF panels are fully damaged and the remaining were partially damaged and in addition another 5 nos were hanging and moved from original space and sustained damages on the edges and were beyond use.  Apart from above some flashings that were still loosely attached to the panels were also damaged.  But the surveyor mentioned in their report that wind speed was 12 km/hour as per Metrological Survey report.  But the surveyor wrongly mentioned without any evidence that the caution of handling with care at the time of carriage and erection has not been carried out.

          According to the recommendation of the surveyor, the indemnity amount assessed and payable on the documents and circumstantial evidence of the loss under the policy is Rs. 4,24,005/-.  The complainant on 25.11.2013 lodged claim to the tune of Rs. 4,24,005/- based on recommendation from surveyor and the Metrological Report on 03.07.2013 as asked by the insurer was also submitted by the complainant.

          Subsequently op no.2 insurance company after a longtime more than four months vide their letter dated 13.03.2014 intimated the complainant that the claim file has been decided to be closed as “no claim” on the ground that storm was not established from the Metrological Report. The complainant vide letter dated 16.04.2014 challenged the decision of repudiation of the insurance company and the cause of loss was for rain and storm which has been established from the Metrological Report as well as from newspaper cuttings and it was also not the only cause but there are other causes also that are covered in the policy under which the claim is tenable.  So the repudiation by the insurer is arbitrating and baseless and the complainant also requested the ops to consider the claim under the EAR policy in terms of the payment recommendation of indemnity amount assessed by the surveyor in its report on 25.10.2013.  But anyhow op did not consider the matter for which complainant being dis-satisfied with the wrongful decision prayed for redressal and compensation etc.

          On the other hand op no.1 Insurance Co. Ltd. by filing written statement submitted that the allegation is false and it is specifically mentioned that Isolloyd Engineering Technologies Ltd. and their invoices specifically noted “Handle with care & proper support during unloading and erection”.  It is specifically mentioned that the surveyor visited the site on 01.08.2013 and assessed only 19 panels and the complainant admitted vide their mail dated 31.05.2014 that the entire consignment of 93 panels were received by their site people in damaged condition and the claim under EAR policy was a mistake on their part.  This proves that the entire claim under EAR policy was cooked up and the story of storm was built up which is a natural phenomenon in June/July as an afterthought to make wrongful money.

          In the report of surveyor remarked the following “we obtained the newspaper report of the same date there is no mention of storm, we request to the insured to please collect the metrological report from the nearest met office”.  Incidentally, the Met office vide their weather report no. TS-INE-003(N.G)/271 dated 01.01.2014 reported that from 30.07.2013 to 31.07.2013 rain fall was only 0.7 mm and maximum wind speed was 12 km/hour and it may be pointed out that the surveyor had used the word “reportedly” while stated about the strong wind but a wind speed of 12 km/hrs reported by the Met office cannot be described as a storm/cyclone/gale even by an expert in this field.

          Fact remains that wind report was submitted to the surveyor by the complainant and assessment and recommendation of the surveyor is not conclusive for payment of a claim under the policy.  It is now an established fact at law that the terms, condition and clauses are binding on both the parties and that is why the surveyor also stated in his report “subject to other policy conditions and the observation above” and by that observation and circumstantial evidence stated that the wind speed is only 12 km/hrs which is not a storm/cyclone/gale and the complainant could not prove the basic law for payment of a claim under the policy, i.e. cause of loss which was not due to storm/cyclone/gale considered as an AOG (Act of God) peril.

          But anyhow surveyor took the normal excess of Rs. 50,000/- in lieu of AOG excess of Rs. 1,50,000/- in assessing the loss and it may be noted that the both normal and AOG excess are printed on the policy schedule making the same as a part of the contract and so it was a mistake on the part of the surveyor and it is further submitted that assessment and recommendation of the surveyor is not conclusive and all circumstantial evidences along with policy terms and condition is paramount in settling a claim.  in fact if the claim would be payable under the terms of the policy, the excess would be applied for Rs. 1,50,000/- making the assessed amount at Rs. 3,24,005/- so the cause of loss was an AOG peril and not the amount wrongly assessed by the surveyor applying a wrong excess violating policy terms.

          When wind speed was 12 km/hrs is called as gentle breeze as per geographical term of wind speed having a speed of 7-10 knots/hrs equivalent to 12-19 km/hr and cannot be termed as Gale/cyclones/storm which starts from a wind speed of 28 knots/hr equivalent to 52 km/hr.  So the entire claim of the complainant is not tenable in view of the policy condition and cyclone/storm/gale.  On the contrary it is found that surveyor has already pointed out and further from the surveyor’s report it is found that there was faulty and it is not of installation which was made on the ground for such damage.  Surveyor has also admitted that speed of the wind run up to 20 km/hr.  So it is not storm/cyclone/gale and for which the present complaint should be dismissed.

                                                      Decision with reasons

          On proper consideration of the entire materials on record including the complaint, written version and further relying upon the argument as advanced by the Ld. Lawyer of both the parties and also for proper appreciation of the policy condition and report of the surveyor, it is clear that in the policy condition, it is specifically mentioned that loss or damage due to faulty design defective materials or causing bad workmanship falls or erection is come under the purview of the exclusion clause. 

          Further from the report of the surveyor, it is clear that loss or damage as found by the surveyor was due to faulty design of installation.  It is one of the cause and that has not been denied by the complainant and complainant relied upon the said report and claimed compensation.  So, it is clear that faulty design of installation was one of the cause of such damage.

          Now the question is whether any cyclone or gale or storm blew on the date of incident on 30.07.2013 and in this regard from the Metrological Report it is clear that on the very date i.e. from 30.07.2013 to 01.08.2013, the maximum wind speed was 12 km/hr and in fact as per Geographical term cyclone means speed of wind is 50 to 60 km/hr but that no such wind was on the date of incident on 30.07.2013 to 01.08.2013.

          Fact remains that as per Metrological Report which has been filed by the op, it is found that distance from Alipore to Dhulagarh ariel not to distance is within 15 to 16 km and on motor road it is 25 km and fact remains that Alipore Metrological office is nearest to Dhulagarh and on the date of incident at Dhulagarh no storm was blown.

          In fact the insurance company categorically denied the allegation that the damage was caused due to storm or cyclone.  It is specific case of the op insurance company that there was no such storm or cyclone on 30.07.2013 in Dhulagarh area and it is specifically mentioned due to faulty erection and construction of the design, damage was caused and complainant initially admitted vide their letter dated 31.05.2014 that the entire consignment of 93 panels were received by the site people in damaged condition.  But same were included with the claim.  But specifically complainant expressed that it was due to mistake.  Then it is clear that complainant’s consignment articles of 93 panels etc. were in damaged condition, they received it and there is several chance that all those damaged panels were placed at the site at the time of surveyor’s inspection only to prove that damage was caused due to storm.  But it is proved beyond any manner of doubt that as per Metrological Report no storm/gale/cyclone was held on 30.07.2013 to 01.08.2013.   No such document is produced from any authority by the complainant to show that there was cyclone/gale/storm held on 30.07.2013 and due to simple wind blow of 12 km/hrs such sort of panel cannot be damaged.  Even if it is found that it was damaged then invariably it was for violating the very caution made in the invoice “handle with care” and proper support with unloading and erection and no doubt surveyor has pointed out very specifically in his report that damage was caused due to faulty erection design and construction that means support was not there.  Whatever it may be when complainant has alleged that the damage was caused due to storm or cyclone on 30.07.2013, then complainant shall have to establish his case that there was storm or cyclone on 30.07.2013.  But most peculiar factor is that complainant has failed to prove any storm or cyclone on 30.07.2013. 

          On the contrary op has proved by the Metrological Report that wind speed is only 12 km/hr and it was not storm or cyclone but normal wind speed in case of rainy-day.  Anyhow at the time of argument Ld. Lawyer for the complainant tried to convince this Forum and insisting this Forum that it is the duty of the op to prove a negative aspect.  But such an argument is completely against principle of law on the ground complainant has accepted that wind blew was 12 kmph and as per Metrological Report, it was 12 km/hr.  So, there was no cyclone or storm on 30.07.2013.

          After considering some Metrological Book, it is found that in general season or any rainy day surface wind is blown 10 to 15 kmph.  Metrological Report also shows that weather report was issued in connection with prayer of the op and weather report does not suggest the existence of any such storm or cyclone on 30.07.2013 to 01.08.2013.  So considering all the above fact and materials we are convinced to hold that complainant has miserably failed to prove the story of storm and cyclone on 30.07.2013 to 01.08.2013 at Dhulagarh area where the company of the complainant is situated.  So, the damage as caused for the insured articles due to storm or cyclone cannot be believed.  So, in the eye of law the repudiation of the claim of the complainant by the op is no doubt as per terms and conditions of the policy.  At the same time the report of the surveyor supports that the damage was caused due to faulty erection design and construction proceeding.  Further it is found that 93 panels were received by the complainant at the erection site with damaged condition.  But same were also placed at the time of inspection by the surveyor and all those conduct of the complainant have given this Forum a chance to believe that complainant as business man is a dishonest business man only to get money by hook or crook all sorts of malpractices were practiced prior to appearance of the surveyor. But anyhow it is proved that there was faulty erection design for which damage was also caused and further it is found that the policy period was from 22.07.2013 to 21.01.2014.  But from the complainant’s own papers, work order was placed with the contractor op no.3 by the complainant order to start the process of erection from 14.03.2013.  It proves that erection work had actually started much earlier than the starting of this policy on 22.07.2013.  then as per policy terms and conditions risk of erection policy start from the time of first consignment material is placed at site but that has been suppressed by the complainant and managed to procure this policy and such sort of process is no doubt suspicious in nature and for that reason, complainant violated the terms and conditions of the policy.  So, it is clear that this construction was started on and from 14.03.2013 and it was continuing for erection and it was not completed and when it was under erection this policy was taken that is proved.

          Further it is proved that at the time of erection proper support was not there for which the panels fell down and no doubt it was a faulty erection design procedure adopted by the complainant’s contractor that was pointed out by the surveyor’s report.

          Ld. Lawyer for the complainant submitted that surveyor assessed loss.  Invariably surveyor assessed the loss but in his report it is specifically mentioned that wind speed was 12 km/hr and faulty erection design and construction was there for which it was damaged and it is also proved that proper support was not there for which due to mere 12 km/hr wind speed the said materials fell down.  It indicates that there was no support at the time or erection or erection point.  Though there is a caution by the supplier company that always even at erection time and point proper support shall be there, otherwise PUF panel shall be damaged.

          So, considering all the above materials, it is clear that surveyor assessed loss pointing the reason of damage only to assess the loss of damage article, but subject to conditions.  When it is already proved that it was caused not for cyclone or storm, but it was due to faulty erection design procedure, then complainant cannot get any compensation as per terms and conditions of the policy and in the said policy, the condition, there is no such clause that due to rain if panels are damaged, complainant shall have to get it.  But it is specifically mentioned in the said condition Memo No. 6 Major Peril (Act of God) claims storm, tornado, hurricane, typhoon, tempest, cyclone or others atmospheric disturbances which is the acts of God.  But in this case nothing is proved.  Complainant failed to prove any of the item for which this Forum can come to a conclusion that this damage was not caused for major peril or AOG.

          Further in the Memo No.4 of the clause it is specifically mentioned that loss or damage the construction of plant and machinery due to de-arrangement, faulty design and defective materials, bad work man ship, falls in erection comes under the purview of Exclusion clause.  When that is the fact, then under any circumstances as per terms and conditions of the policy, complainant is not entitled to get any relief and the repudiation as made by the op is no doubt as per terms and conditions of the policy when no storm or cyclone held on 30.07.2013 to 01.08.2013.

          Moreover complainant himself has relied upon the surveyor’s report.  Surveyor’s report does not support that damage was caused due to cyclone or storm.  On the contrary it was due to faulty design and construction and as because there was faulty design construction at erection site due to mild wind of 12 kmph, the entire construction fell down and considering that fact and also the settled principle of law, we find that parties are strictly governed by policy conditions and no exception or relaxation can be made on the ground of equity and to that effect we have relied upon the ruling reported in 2013 (4) CPR 165 NC which supports our view.

          It is further settled principle of law “ no claim shall be entertained by the insurance company if any claim as per clause is not tenable in the eye of law and in case of violation of terms and conditions of the policy, particularly such sort of policy, complainant is not liable to get any benefit.  Moreover in the present case it is clear that complainant adopted unfair practice by producing damaged 93 PUF Panels at the time of inspection which was admitted by him subsequently to the op by a letter dated 31.05.2014.  But those panels were assessed by the surveyor at the erection point and this is the conduct of the complainant.  So, the conduct of the complainant no doubt is a conduct of a dishonest business man and truth is that damaged 93 panels were placed at the erection site at the time of inspection by the surveyor, so surveyor assessed it and that was subsequently admitted by it to the op by an e-mail.

          Then it is clear that the entire claim of the complainant is false and fabricated when there was no storm, no gale or cyclone.  But it is nothing but a plain wind blew generally found in rainy season and normal wind blow from 10 to 15 kmph as per Metrological Surveyor’s Report.  So, the entire allegation of the complainant against the op about illegal repudiation or negligent manner of service etc. are proved a false and fabricated allegation for which this complaint fails.

          Hence, it is

                                                             ORDERED

          That the complaint be and the same is dismissed on contest against the ops with penal cost.

          Complainant is hereby directed to deposit a penal cost of Rs. 10,000/- to this Forum within 15 days from the date of this order failing which penal action shall be started against the complainant for not releasing of the penal interest.