PBEFORE THE CONSUMER DISPUTES REDRESSAL FORUM, ERNAKULAM.
Dated this the 29th day of February 2012
Filed on :22-04-2010
Present :
Shri. A Rajesh, President.
Shri. Paul Gomez, Member. Member.
Smt. C.K. Lekhamma, Member
C.C. No.251/2010
Between
Appu’s Plywood Industries, : Complainant
Iringole P.O., Perumbavoor, (By Adv. Sain Paul Alunkal
Rep. by its Proprietor, Room No. 10, IInd Floor, Edassery
Mrs. Ambika Prakash- 683 548. Building, Banerjee road, Ernakulam.)
And
National Insurance Co. Ltd., : Opposite party
Branch office, (By Adv. Deepu K.V. North
Mullappally Building, Paravur, -683 513)
A.M. Road, P.B. No. 24,
Perumbavoor,
Rep. by its Branch Manager.
O R D E R
A Rajesh, President.
The case of the complainant is as follows:
In 2007 the complainant availed 2 insurance policies from the opposite party and since then the policies are continuing without any break. The 1st policy is a boiler and pressure plant insurance policy and the 2nd one is a Standard Fire and Special peril policy. As per the former policy oil boiler and steam boilers (3 in numbers) with sum insured of Rs. 13 lakhs and as per the latter policy the entire building including boiler oil and furniture, fixtures and fittings, stock of raw materials finished and semi finished, good packing materials pertaining to trade were covered with sum insured of Rs. 41 lakhs. On 07-09-2008 a fine broke and in the factory premises when the drying operation was going on. At the instance of the complainant a surveyor appointed by the opposite party inspected the factory premises on 09-09-2008 and 19-09-2008. The claim of the complainant was partly allowed by allowing Rs. 70,309/- as against the total claim amount of Rs. 8,60,623/-. The request of the complainant to reconsider the claim was turned down by the opposite party. Thus the complainant is before us seeking direction against the opposite party to pay Rs. 8,60,623/- with interest being the insurance claim together with compensation and costs of the proceedings.
2. The version of the opposite party
The opposite party admits the issuance of 2 policies to the complainant. The fire was as a result of leakage of thermic fluid in the boiler system and its subsequent fermentation. The damages due to fire are clearly excluded under the boiler policy. The insurance surveyor rules out the complainant’s version regarding the cause of accident. As per the report the cause of accident originated from the boiler itself as the heat in the theomic fluid got increased and got it burning. As per the policy conditions in the fire policy it is clear that the damage caused to a property in fire and if caused due to its own fermentation, it is not covered in the policy. The report of the Kerala Fire and Rescue Department is also goes to show the cause of fire as due to leakage of oil from the boiler. The non-intimation of the accident to the policy is suspicious. As the damage to the boiler is caused not due to external source, the fire policy does not become operative. There is no deficiency in service on the par of the opposite party.
3. No oral evidence was adduced by the complainant. Exts. A1 to A4 were marked on their side. The witness for the opposite party was examined as DW1. Exts. B1 to B7 were marked on their side. Heard the learned counsel for the parties.
4. The points that arose for consideration are
i. Whether the complainant is entitled to get an insurance clam
of Rs. 8,60,603/- from the opposite party?
ii. Whether the opposite parties are liable to pay compensation
and costs of the proceedings to the complainant
5. Point No. i. Admittedly the complainant availed Ext. A1 Boiler and Pressure Plant Insurance Policy and Ext. A2 standard Fire and special perils policy from the opposite party for the period from 28-05-2008 to 28-05-2009. During the currency of the above policies fire broke out at the factory premises on 07-09-2008 at about 2 p.m. On intimation the surveyor appointed by the insurance company prepared Ext. B1 and B2 Survey reports. On the basis of the survey reports the opposite party partly allowed the insurance claim. The complainant requested the opposite party to reconsider the 2nd claim, however, the opposite party rejected the application vide Ext. A4 letter dated 25-06-2009 which reads as follows:
1. As per the survey report, the cause of the damage is over heating and subsequent overflowing of Thermic Fluid resulting in falling over the veneer kept nearby and subsequent ignition and spread of fire.
2. This is a clear exclusion under the Boiler Pressure plant policy where explosion or implosion is only covered and Fire is an excluded peril.
3. As the damage to boiler is not due to fire emanating or caused from external source, the fire policy does not become operational vis-à-vis damage to boiler.
4. However, claim for other items damaged in the fire have been paid under fire policy.
In view of the above we regret to inform you that we are not in a position to entertain your complaint for the payment of additional claim amount, further to the claim amount already released to you.”
As per Ext. B4 the terms and conditions of Boiler and Pressure Plant Insurance Policy the opposite party agreed to indemnify the following:
i. Damage (other than by fire) to the boilers and/or other pressure plant described in the schedule.
ii. Damage (other than by fire) to surrounding property of the insured described in the schedule or to property held by the insured in trust or on commission or for which he is responsible.
iii. Liability of the insured at law on account of
(a) death of or bodily injury to any person (other than a person under a contract of service apprendiship with the insured sustaining death or bodily injury which arises out ;of and in ;the course of employment with the insured.
(b) Damage to property; ;not belonging to the insured nor holding trust or on commission nor for which he is responsible caused by and solely due to Explosion or Collapse as hereinafter defined of any boiler or other pressure plant described in the schedule occurring in the course of ordinary working.
Provided that the liability of the company for any one item of the insured property and third party liability shall not exceed in the aggregate in any one period of insurance the sum insured set against such item in the schedule unless the sum insured under such item is reinstated after occurrence of a clearance of the balance period.”
7. In Ext. B5 standard Fire and Special Peril Policy(notional damage) the opposite party has insured the following.
1. Fire
Excluding destruction or damage caused to the
property insured by
a. (1) Its own fermentation, natural heating or
spontaneous combustion
(ii) its undergoing any hearing or drying process.
b. Burning of property insured by order of any public
authority.
8. The learned counsel for the opposite party vehemently contented that the damage was caused due to fire and as per exception clause No. 1 in Ext. B4 the said policy is in operate.
Clause No. 1 reads as follows:
“The company shall not be liable under this policy in respect of
1. Loss damage and/ or liability causedl by or arising from or in consequence directly or indirectly of fire ( arising from explosion or collapse or any other whatsoever) including extinguishment of a fire or clearance of debris and dismantling necessitated thereby smoke soot aggressive substance lightning theft collapse of buildings subsidence landslide rockslide water which escapes from water containing apparatus flood inundation storm tempest earthquake volcanic eruption of other acts of God impact of landborne waterborne or airborne craft or other arial devices and/or articles dropped there from.
Further he relied on Exclusion clause No. 7 in Ext. B5 which reads as follows:
Loss or damage to any electrical machine, apparatus, fixture or fittings arising from or occasioned by overrunning excessive pressure, short circuiting, arcing, self heating or leakage or electricity from whatever cause (lightning included)provided that this exclusion shall apply only to the particular electrical machine, apparatus, fixture or fitting so affected and not to other machines, apparatus fixtures or fittings which may be destroyed or damaged by fire so set up.”
10. The insurance surveyor who prepared Exts. B1 and B2 survey reports was examined as DW1. The cause of accident as per Ext. B1 and B2 reports are the same which is as follows:
“The insured has reported that the pump got stuck and the movement of the thermal fluid came to a stand still position, as a result of which the temp: in the system went on increasing. But this does not appear to be correct. We have examined the pump in detail. Although the external surface of the pump was found to have been burnt the pump shaft was freely rating. Obviously the observation of the insured is not correct. Although there is no log register is maintained for power failure we are quite sure that the cause to a stop disabling the movement of thermic fluid, and thus overheating from the fluid; which started burning, and overheating from the expansion tank, due to the sudden increase in volume. The burning fluid fell over the core veneer spread near the boiler installation which also got ignited, and the fire quickly spread to the adjacent areas.
In the event of power failure, which is not uncommon in this area, the blowers attached to the drying compartments will come to a sudden stop which will totally prevent the transfer of heat from the thermic fluid, and also the distribution of heat into the product. This can cause an immediate rise in the temp, of the fluid. Besides, the only protection available for the boiler system in the plywood factories in this area, is just an ‘audio alarm’ which will be also disabled instantaneously, throwing the entire system into total disaster. This is exactly what happened in this case; and this is normally the cause of fire accident in most of the cases, in the plywood industries in this area.
11. The surveyor has rejected the insurance claim of the complainant as per Ext. B4 policy stating that, “the policy covers the boiler including the thermic fluid. As already explained above all the damages which took place on the boiler and its accessories have been caused due to fire and fire only, and cannot be considered for compensation. The damages caused by fire is an exception under the boiler and pressure plant policy.” However he has assessed the damages in Ext.B1 at Rs. 2,08,814/-. The surveyor in Ext. B2 report assured the damages to the tune of Rs.70,407/- and the same has been disbursed to the complainant as per Ext. B5 policy.
12. Now the only question that remains before us is whether the complainant is entitled to get insurance claim as per Ext. B4 policy. DW1 the surveyor deposed before the Forum that the fuel pump got struck due to current failure. However he admitted that power generator had been installed at the premises. Further he stated that there is no evidence to prove the failure of power at the premises. He went to say that it is common in plywood industry that as and when power supply fails there is a possibility for occurrence of fire. This is an observation of the surveyor. The report of the surveyor that too based on presumptions, assumptions and surmises need not necessarily be relied upon. Further more DW1 admitted that he has not dismantled the pump to ascertain the actual cause of damages which is necessary for the assessment of actual cause for damages in which he failed. In view of the above discussion we are of the opinion that the reasons stated by the surveyor to reject the insurance claim of the complainant as per Ext. B2 policy is unsustainable.
13. The complainant contended that he had to suffer loss to the tune of Rs. 8,60,623/- as per Ext. A3. However nothing is on record to overcome the findings of DW1 in Ext. B1 regarding quantum of loss sustained by the complainant. He quantified the loss at Rs. 2,08,814/-.
14. In view of the above we are of the firm view that the opposite party is liable to pay Rs. 2,08,814/- to the complainant together with interest @ 12% p.a. from the date of complaint till realization. Ordered accordingly.
The above said order shall be complied with within a period of one month from the date of receipt of a copy of this order.
Pronounced in the open Forum on this the 29th day of February 2012
Sd/- A Rajesh, President.
Sd/- Paul Gomez, Member
Sd/- C.K. Lekhamma, Member.
Forwarded/By Order,
Senior Superintendent.
Appendix
Complainant’s Exhibits :
Ext. A1 : Copy of duplicate schedule
A2 : Copy of standard fire and special
perils policy
A3 : Copy of statement
A4 : Letter dt. 25-06-2009.
Opposite party’s Exhibits :
Ext. B1 : Survey report dt. 15-12-2008
B2 : Survey report dt. 15-12-2008
B3 : Copy of boiler & pressure plant
insurance policy
B4 : Boiler &Pressure plant Insurance
policy
B5 : Copy of Standared ire and
special perils policy (material
damage)
B6 : Copy of boiler & pressure plant
insurance policy.
B7 : Standared fire and special perils
policy (material damage)
Depositions:
DW1 : K. U. Varunny
Copy of order despatched on :
By Post : By Hand:
