07-01-2015 -  The reasons for delay in disposal of this appeal can be seen from the order sheet.

        Heard the parties on the prayer of the appellant for condoning the delay of about four months in filing this appeal.

2.       According to the appellant, it’s panel counsel misplaced the file due to which no prompt intimation could be sent to the appellant and hence it was not knowing about the dismissal of the complaint case.

3.             Such ground is absolutely vague and general. The appellant should have been vigilant, in knowing about the disposal of the complaint case but it has tried to throw the entire blame on its panel counsel that he misplaced the file, as, if the Insurance Company had no responsibility at all.

4.       Thus, there is no satisfactory explanation for the long delay of about four months.

However, we are condoning the delay in the interest of justice.

5.       Heard the parties at length on merits.

6.       Mr. Ashutosh Anand, learned counsel appearing for the appellants/ Insurance Company submitted that the alleged loss occurred due to the negligence of the respondent/ complainant itself and therefore the claim was rightly repudiated on the ground that the cause of loss was outside the scope of the policy. He referred the materials on the record while assailing the impugned judgement.

7.       On the other hand, Mr. Jaiswal, learned counsel appearing for the complainant supported the impugned judgement and submitted that the complainant was not responsible for the loss and that the claim has been wrongly repudiated by the Insurance Company. He also submitted that before giving the Insurance Policy, the Insurance Company did not raise any issue regarding the floor of the Godwon, but for repudiating the claim, it’s Surveyor and the Insurance Company have raised untenable issues. He lastly referred to certain judgements.

8.       According to the complainant, when the Godown  was opened  on 1.9.2006, it was found that the stocks kept therein was damaged due to over flowing / entering of drain water into the campus and then inside the Godown due to rains . The Insurance Company was immediately informed and it appointed surveyor named Ajit Kumar Sahu, who conducted the survey from 5.9.2006 to 9.9.2006. The complainant then lodged the claim on 10.10.2006 but it was wrongly repudiated.

 9.       According to the Insurance Company as per the Surveyor’s report dated 20.3.2007, the loss was not due to rain water entering into the Godown but was due to seepage of water due to bad floor condition of the Godown. On 1.9.2006 the rainfall was very meagre due to which rain water could not enter into the Godown.

10.      The learned District Forum after considering the respective cases of the parties, the materials on record, and the judgements relied by them,  interalia held that it was the cumulative effect of the rainfall during the period in  question which led to overflow of water from the drain which entered into the Godown of the complainant; and that the loss suffered due to this, was covered under the policy; and that the seepage was not a cause of damage of goods.

11.      The learned Lower Forum, on the basis of the report of the Surveyor, directed the Insurance Company to pay Rs. 3, 31,534/- with interest @ 10% per annum from the date of repudiation of the Insurance claim i.e. 4.3.2003 till realization, besides litigation cost of Rs. 5000/- , within 60 days of the order, failing which the Insurance Company was also made liable to pay penal interest @ 18% per annum on the total amount from the date of the order. 

12.     It appears from the joint inspection note that the Godown in question was last opened on  25.8.2006  by the Complainant and then when it was opened on 1.9.2006, the stocks kept therein were found damaged.

            In the claim form, the complainant mentioned the reason for loss as – rain water entered in Godown.

  The Surveyor Mr. Ajit Kumar Sahu appointed by the Insurance Company in his report dated 20.3.2007, interealia observed as follows. The walls and floor of the insured premises were very old. The floor was cemented and was approximately 1.5 ft. lower than the level of the Baramda. The floor had cracked at number of places and cement plaster was practically missing. The insured had put plastic sheets on the floor above which the stock was stored. A huge water body was near to the Godown and the condition of the floor being bad, water must have been seeping into the Godown for quite some time causing loss. There was still water on the floor. The only probable cause of water entering into the Godown was seepage from the floor.  The damage could not have taken place in just one day of rain. The weather report showed that there was meagre rainfall in the morning of 1.9.2006, which cannot enter into the Godown.  The Surveyor concluded that as the loss was not due to an insured peril, the liability was not within the scope of the policy.

13.     In our opinion, firstly, the Surveyor’s report, which is the basis of repudiation of the claim, is unreliable; secondly, if the seepage was from the water body, such seepage could damage the goods, even without rains; thirdly, the Insurance Company is estopped from taking such plea that as the floor of the Godown was in bad condition and therefore there might be a chance of seepage from the nearby water body. The Insurance Company should have examined these things before entering into the insurance contact; and fourthly, the case of the complainant that damage occurred due to entering of overflowing drain water, during rainy season appears to be supported by the materials on record, as held by Learned Lower Forum.

14.     Further, according to the complainant, the Godown was last opened on 25.8.2006 and then when it was opened on 1.9.2006 the goods were found damaged. The rainy season in this area starts from mid of June. Therefore, it appears that when the Godown was last opened on 25.8.2006, there was no damage to the goods even during the continuance of the rainy season for more than two months.

15.     Moreover, the following judgements are relevant.

Admittedly, the policy in question, includes damage due to “flood and inundation”.

          In the judgement reported in I (2008) CPJ 208 R.P. Bricks etc., the Hon’ble Madhya Pradesh State Consumer Forum, interalia held as follows;

“………. In fact, both these terms flood and inundation are synonyms which as per Chamber’s Dictionary means “over flowing”. As per Webster’s Comprehensive Dictionary “inundation” means a flood, a condition of super abundance. Words inundate, flood, over flow are treated as synonyms.

7.       It will be thus seen that flood or inundation does not mean that there should be flood in any nearby river or water pond etc. A flood or inundation may take place even in planes due to heavy rains……..”

16.     As noted above ‘inundation’ means over flowing. Over flowing of drain can occur due to clogging, rains, or some other reasons.  

17.     In the case reported in II (2009) CPJ 311 NC , United India Insurance Company, the Hon’ble National Commission considered whether the damage of unfinished umbrella stick due to high density of moisture grown up during the situation of flood, was within the peril of the policy or not.

          The Insurance Company emphasized on the word – “destruction or damage directly caused by ……… flood or inundation.”

The Hon’ble National Commission after considering the definition of “direct casue,” and  “direct and promimate cause”, held that loss was caused from direct and proximate cause of inundation,.

18.     In our opinin the claim was within the peril event under the Policy. Accordingly ,we do not find any ground for interference with the impugned judgement .

            However, in the facts and circumstances of this case, and to meet the ends of justice,we modify the operative portion of the impugned judgement,as follows-

            The appellants/ Insurance Company is directed to pay Rs. 3,31,534/ along with the litigation cost  of Rs. 5000/- to the complainant / respondnet within 60 days of this order , failing which they will be further liable to pay penal interest @ 15% per annum on the said amount from the date of this order till the date of payment/ realization.

          With these modifications,this appeal stands disposed off.

          As prayed, let the statutory amount be returned to the appellants.

Issue free copy of this order to all concerned for information and needful.

 Ranchi,

 Dated:- 07-01-2015