1.       The complainant is in the business of trading in electronic items such as cell phones, electronic component accessories of mobile phones, I-pods, cameras, gaming devices, computers and other audio video consumer electronics.  The complainant stored its stocks at a warehouse in Bhiwandi in Building No. I/12, Gala 8, 9 & 10, Shri Arihant Compound, Kalher, Bhiwandi, Thane.  The stocks stored in the said premises were insured with the opposite party National Insurance Co. Ltd. under a Floater Policy for a period 18.04.2013 to 17.04.2014 for an insured sum of Rs.5,00,00,000/-.

2.       It is alleged that at midnight around 12:30/12.45 a.m. in the early morning hours of 03/04.07.2014, after heavy rains and waterlogging, the building collapsed.  Several people were injured and some also lost their lives in the said collapse.  According to the complainant, the insurance policy covered the entire risk of stocks and accordingly the intimation was given to all concerned, including the Insurance Company, about the said accident.  One of the grounds taken in this complaint is that the Insurance Company kept the matter pending for no valid reason and that the surveyor report was submitted belatedly.  Not only this, the claim was also repudiated after the filing of the present complaint and the repudiation letter was brought-forth through the written version of the opposite party.  The contention is that the Insurance Company has violated its obligations and so has the surveyor which amounts to breach of the regulations of the Insurance Regulatory and Development Authority (Protection of Policyholders’ Interests) Regulations, 2002. 

3.       The information was also followed by a claim form that was tendered intimating the cause of incident and losses suffered.  A request was made for appointment of a surveyor.  The Insurance Company in turn on 05.07.2013 called upon Mr. Atul C. Shah to conduct a preliminary survey of the said loss and to submit his report with the photographs at the earliest.  The request was to carry out the survey immediately and provide the feedback accordingly.  Mr. Shah vide letter dated 08.07.2013 intimated the complainant that they visited the premises on 06.07.2013 and inspected the building, the stock available and discussed the matter with the insured. Through the said letter, the surveyor asked for 24 documents, including the documents relating to the building.  The said letter records that the complainant had intimated the cause of collapse of the building due to SUBSIDENCE.  The said word in ordinary parlance means the sedimentation or precipitation and, more particularly in relation to solid or heavy things, the settling thereof to the bottom.  It also connotes sinking to lower levels and in short a fall in the level of ground.  It can be gradual or sudden due to dynamic and variety of causes.

4.       In the instant case, the incident was reflected as the building having collapsed due to sinking of the soil/earth on which the building was standing.

5.       Through the said letter dated 08.07.2013, the complainant was called upon to engage any specialized agency to carry out a test for confirming the cause of collapse of the building for which time was taken by the complainant to furnish the same.

6.       Regarding the accident a preliminary report was submitted by Mr. Atul C. Shah on 08.07.2013 where again it was indicated that the surveyor was informed of subsidence being the cause of collapse.  In order to appreciate the facts of this case, it would be appropriate to quote paragraphs 6, 7 and 8 of the said preliminary report that are extracted hereunder:

“6.     LOCATION & CONSTRUCTION & OCCUPATION : -

The insured’s property is located at Building # I/12 in Gala # 8, 9 & 10 at first floor in the building, which is constructed as ground plus one upper floor.  It is in the complex, which is well known as Shri Arihant Compound in the Village of Kalher, Tal. : Bhiwandi, of Thane District of Maharashtra State.  The complex is having more then 100 buildings inside the compound.  All these buildings – galas are occupied as manufacturing units with offices as well as some of as godown, where various materials are stored, but reportedly none of godown are having any flammable materials.  The premises is about 8 – 10 kms from proper Bhiwandi town, about 10 kms from Thane City and about 40 kms from Mumbai city.

The premises is much inner side from the road, known as Thane Bhiwandi Road.  It is also much inner side from the main gatge of complex.  The internal road of the complex was found in average condition.

It is situated in one of the average area, inheriting all the disadvantages, being not a posh/VIP area.  The insured is working in the premises, which is rented from their family member.

The premises was found completely collapsed.  Upon inquiries, with the Insured’s representative, Mr. Girishbhai, the description of building was given and also shown us the neighboring building, saying the collapsed building was identical.  It was reported that the premises was ground plus one upper floor, R C C framed building structure, admeasuring about 10,000 Sq Ft., put together all 3 galas, belongs to the Insured.  Gala # 8 is shearing common walls with their neighbouring premises i.e. gala # 7, who are garment manufacturer.

The walls were of masonry walls with plastered on its both sides.  The roof of the same premises was of R C C flat slab.  The main gate were having M S Rolling shutter.

The premises i.e. gala # 8, 9 & 10 were occupied by the Insured, where they were storing their goods.  Adjacent to the Insured’s premises i.e. in gala # 6 & 7, there was garments manufacturing unit situated.

The Insured are not known about the occupant at ground floor galas.

7.       OCCURRENCE :

It was reported by the insured, Mr. Hemant Budhdeo that on 04-07-2013 in the early morning at about 1.00 or so, (i.e. mid-night on 03-07-2013) he got a phone call from one of his worker that their godown building, situated at Bhiwandi was collapsed.  It was further reported that one of worker, working in the building, opp. To the Insured’s building noticed the building was collapsed, who informed that matter to the Insured’s worker, who then informed the matter to the Insured.

Reportedly, hearing the same the Insured rushed down to their godown and reached about 3.00 in the mid-night, when he found that fire brigade, police people and disaster management team had already landed at the spot and already started rescue operation, as the garment manufacturing factory was in operation at the time of an incident and about 25 workers were there inside the factory.

The police people have then cordon the area, hence the Insured were not able to see the position of their materials.

Again the Insured came back on the next day morning, when they found that the rescue team has started removing debris to escape the workers under the debris to save their lives.

Immediately the Insured informed that as their materials are lying in this area, below the debris and by removing the debris with J C B, they may loss the saved materials – if any, at the lower level of the debris.  Reportedly the people have stopped the removing debris from the place, afterward, where Insured’s gala were located, whereas kept continue rescue operation from the area, where the factory was located and workers were working inside the factory.

8.       INSPECTION & FINDING

When we visited the insured’s site, things were left as these were, after collapsed of the building.  The insured informed us that they had not shifted any item after the incident, as per the instructions of the people of various Govt. departments, landed at the affected location.

We visited the Insured’s affected site and found that still the things were left in as it is condition, whereas the disaster management people were still trying to find out the workers, under the debris, as 4 workers were still missing.  It was reported that 21 people were insured and 6 were expired in the incident.

At the time of our immediate visit at the Insured’s affected location, we found various stocks of the Insured, were still lying at the top of the heap of debris, which were found damaged/affected due to mixed with the debris and at the same time due to rain, these are then mixed with mud.  Randomly, we picked various items and checked one by one and found that though these are covered/packed in plastic bags/pouches, rain water penetrated inside and after taking out various items, found spot of mud on these articles.  The Insured were immediately informed to collect all these articles available to collect and keep aside for further inspection require – if any.

We found various M S racks in meshed condition and upon our inquiries, it was reported by the Insured’s representative that these are racks, where the Insured were storing their materials with inner-boxes/packing.

We found various original cartoons of the materials, but major of them were in empty condition.  Upon our inquiries, it was reported to us that these are the outer packing of the materials, whereas it also has inner packing of 6 pcs. After getting cartoons of big size, they use to open all these cartoons, put their stickers on each and every products and after packing in smaller boxes/inner packs, keeps boxes on racks, as per the product codes.

The matter was further discussed with the Insured in long length about the reason/s of collapse of building, it was reported to us by the Insured that the building was collapsed due to Subsidence.

We have very carefully inspected the portion of building to know the sign of Subsidence by way of settlement and/or tilting from any area.  From the available area to see, we could not found any sign of Subsidence.  Still the Insured were saying the cause of the collapsed is Subsidence.  The Insured were informed to call on us after removal of debris for further detail inspection of its plinth level, foundation – footings etc., to arrive at the conclusion/s.

Upon our further inquiries, it was found that the building was constructed as ground floor structure only at the initially stage in the year 2004, by M/S Arihant Developers.  The first floor, was reportedly constructed in the year 2011 by the same builder when the Insured’s family members have purchased 3 nos. of galas.

We have referred various cuttings of News Papers (Attached with this Report) are saying the cause of collapse as …

1.       That the building was already weak and the developers have started constructing additional floor i.e. second floor on the existing building,

2.       That huge cement blocks of cement were lying on the second floor and due to rain water, mounted pressure on the structure,

3.       That the building plan was improper, pillars were weak and the builder had constructed another unplanned pillar,

4.       That the building was legal upto 1^st floor, but the 2^nd floor, where construction was under way, was allegedly illegal.  The buildings main pillars got damaged, while work was under way, 2 days ago,

Reportedly, the goods/stocks were, stacked systematically, in M S slotted racks, after leaving space between 2 rows for the movement of people and to load – unload the materials.

In general the damage caused is quite severe on the building & stocks.”

7.       The Surveyor reminded the complainant about sending of information.  The claim form which was filed by the complainant is on record along with the rejoinder where the cause of loss is shown as collapse of building structure.  It is relevant to point out that in respect of the documents that had been demanded by the surveyor, the complainant had submitted the agreement being the approved plan for the Arihant Complex, and the NOC for construction vide letter dated 29.07.2013.

8.       The complainant hired the services of M/s Vijna Consulting Engineers through Mr. Sagar Patil, a Civil Engineer, to conduct an inspection and submit a report on the structural health condition of the first floor of the building in question.  The said consultant submitted a report dated 03.09.2013 which indicates the structural health evaluation of building no. I-8 which is a ground + one floor building mentioned in the report about 15 years old.  The said inspection report indicates a Non-Destructive Test being carried and the conclusion drawn in the said inspection is that the quality of construction is good but not up-to the mark.  The conclusion of the said report dated 03.09.2013 is extracted hereunder:

“CONCLUSION ON TEST RESULT  

Ultrasonic pulse velocity test

The readings in this case are in range of 1.93 Km/sec to 4.10 Km/sec and the average reading is 2.54 Km/sec, which indicates quality of concrete is good but not up to the mark (as per cl.7.1.1 table 2 of IS 1311 (Part 1):1992).

Rebound Hammer test

The readings in this case are in range of 16 Mpa to 39 Mpa and the average reading is 29.98 Mpa, which indicates concrete strength is good.

Based on the above survey it can be concluded that,

• Quality of construction is good but not up to the mark.
• It is required to strengthened RCC members by injecting epoxy grouting where Ultrasonic pulse velocity test reading is below 2.5 and which are lesser than 2 that should be wrapped using unidirectional glass fiber reinforcement to enhance its capacity as well as durability of the structure.
• Water-based protection from the top level and well as end walls are required to prevent water seepages which lead to rusting of main reinforcement of the structure in future.
• This all supporting and repairing treatment will prevent further distressing of structure.”

9.       Another inspection was carried out in November, 2013 at the instance of the complainant by Sardar Patel College of Engineering, Munshi Nagar, Andheri (W), Mumbai.  The said report has also been brought on record.  The report mainly focuses on the status of soil and sub-soil of the premises and also evaluates the bearing capacity of the soil.  After having carried out the inspection, the said report was tendered on 30.11.2013 and paragraphs 6 and 7 of the said report assess the causes of failure which is gainfully extracted hereunder:

“6.     PROBABLE CAUSES OF FAILURE

          Subsidence is the vertical downward movement of foundation caused by the loss of support of the ground beneath the foundation (Refer – http://www.subsidencesupport.co.uk, A Guide to Subsidence).  The word subsidence and settlement are synonymous and are sometimes used interchangeably.  Some of the main causes of subsidence/settlement are

1. Poor soil under the foundation
2. Foundation load exceeds allowable bearing capacity
3. Washing away of fines from non-cohesive soil
4. Long-term settlement of cohesive soil
5. Soil shrinkage in clayey soils
6. Decomposition of organic soil
7. Presence of trees in the vicinity
8. Improper compaction of filled soil
9. Presence of cavities below foundation either due to mining, washing away of fines because of leakages, soluble rocks, etc.
10. Vibrations
11. Leaking drains and water mains

At the site under investigation, probable cause of subsidence/settlement leading to failure of part of Building No. 1 I-12 could be due to any one or more of the above-mentioned causes.

1. During this monsoon, rains in Thane District and particularly in Bhiwandi were higher than normal.  In Bhiwandi, normal rainfall in a season (June 01 to September 30) is around 2400 mm.  Last year rain fall up to mid November was only 2150 mm as compared to 2850 mm this year, an increase of about 700 mm (increase of 30 – 35 %).  (Refer Annexure-4 – Rainfall Data http://maharain.org).  It may also be noted that on June 10 and June 17 Bhiwandi experienced more than 200 mm and more than 100 mm rains (information collected from Office of the Dy. Director General Meteorological, India Meteorological Dept., R S / R W Observatory, Balmanwada, Vile Parle (east), Mumbai 99, Daily Rainfall Data for 24 hours-Annexure-5).

2. At this site, at some locations soil is sandy (pit B-2), at some locations it contains fines which are clayey (pit B-1) and at some locations it contains fines which are non-plastic and silty (pit B-3).  At pit B-4, soil contains high amount of clay with appreciable sand and gravel.  Thus, the soil is highly heterogeneous.  Because of heavy rains fines from some soil may have been washed away.

3. Drains surrounding the Building I-12, because of soil movement could have got clogged leading to inundation of the area.  These could have aggravated and led to some more movement of underlying soil.

4. It is quite possible that because of unexpected continuous presence of water due to failure of drains to function efficiently soil below the foundations could have softened / weakened leading to loss of strength.

5. As mentioned in the report clay is present as pockets at some locations and as layer at other layers.  Because of the heterogeneity of the stratification it is also quite possible that some locations foundations may be resting on such clayey deposit.  As mentioned earlier in the report this clay deposit because of water accumulation and due to its low permeability could have softened leading to more unexpected settlement of some columns leading to differential settlement between foundations.

6. Because of heterogeneity and the prevailing site conditions it is difficult to accurately estimate the safe bearing capacity with high degree of confidence. However, based on limited investigations carried out, we feel that the design load intensity on foundation should be restricted to 18 – 20 t/m² or lower.  This capacity assumes that the settlement would be within the permissible limits.

7.       CONCLUDING REMARKS

          The building collapsed due to structural failure of single or multiple members.  We were approached by Nissan Enterprises and Others to investigate whether the structural failure was due to subsidence of land below.

          Collapse of the structure occurred in July 2013 and we visited the site in October 2013.  Due to this time gap some tell-tale marks which could have led to a better understanding may have been obliterated.

          Based on our inspection of the site and various tests conducted, in our opinion it appears that clogging of drains close to the collapsed structure resulting in its inefficient working.  This may have caused inundation of water in the area during heavy rains which most probably resulted in subsidence/settlement of some foundations.  This, along with foundations resting on heterogeneous soil, may have got eroded leading to differential settlement and subsequent failure of the structure.”

10.     In addition thereto, the complainant also engaged the services of M/s S.S. Bhat, Structural Designer & Consulting Engineer who also submitted a report dated 03.12.2013 which is extracted hereunder:

“STRUCTURAL – INSPETION REPORT

BUILDING I-12 in SHREE ARIHANT COMMERCIAL COMPLEX AT VILLAGE KALHER/KOPER TALUKA BHIWANDI, THANE DISTRICT, MAHARASHTRA.

At the request of Mr. Hemant N. Budhdeo of M/s. Nissan Enterprises Ltd. and others, the undersigned visited on 02-10-2013, the site of Building I-12, where part of building had collapsed and part of building was in position in a somewhat damaged condition.

It was reported this building, building (part) had collapsed on 4^th July 2013 during peak monsoon season.  The incident was widely reported in print media as well as coverage by Television media.  It was reported that the building suddenly collapsed past midnight on 4^th July 2013.  There were a few casualties in the incident.  We are informed that the Police and the Fire brigade had forbidden other public and anybody from entering the premise as their investigations were under progress.  We are informed, the police investigation took a long time and it was only by the end of September that other private agencies were allowed to enter the premise for investigation.

The purpose and object of visit and inspection was to find out the cause/causes of collapse of some part of structure and some part remaining unaffected.  The inspection team comprised of

1. The undersigned Mr. S.S. Bhat
2. Mr. Cyrus Tata of M/s Geoprofiles.
3. Dr. R.A. Hegde professor of Civil Engg. Dept. S.P. College of Engineering.

During the visit, Mr. Budhdeo provided us the Kopar Gram Panchayat’s approved building layout drawings for the project.  We were informed that the Structural drawings for the building were not available.

VISUAL INSPECTION –

At the time of our visit, 02-10-2013, the debris of collapsed part of the building had been cleared and only the plinth of this structure was available for inspection.  Based on the information and building layout drawings provided by M/s Nissan Enterprises and others, we carried out a detailed physical inspection of the Structural members.  We prepared a layout drawing for easy identification of the Structural members.  Copy of the drawing is enclosed with this report, as Enclosure ‘1’ (Refer Dwg. No. 1247-A2).

During our inspection, we noticed that Column No. C-38 was standing above plinth for about 2.0 M. IN HEIGHT.  This Column was slant in position and not vertically in plumb indicating some effect of forceful pull on this column.  Possibly some effect of this column slant is seen on the connecting plinth beam.

Enclosure ‘2’ (Refer Photograph Nos. 3, 3 – 3,4 – 4)

Enclosure ‘3’ (Refer Photograph Nos. 5, 5 – 5)

To further investigate into the cause of the collapse it was unanimously decided to expose the RCC.  Footings and underlying founding stratum of soil, by breaking the plinth and removing soil over burden by controlled excavation.

Upon the excavation being completed, the same team visited the site on 16-10-2013 to examine the R.C.C. footing and underlying founding stratum of soil.  Samples of the sub soil were collected by Mr. Tata and Dr. Hegde for testing.

The surrounding site block plan, layout plan, infrastructure such as drains, internal roads and service drains were also examined.

The adjoining existing structures were also observed generally.  It is pertinent to mention here that there was no structural defect or damage observed in adjoining structures.  Physically the RCC members of the adjoining structures seemed to be of acceptable standard.  We were informed by Mr. Budhdeo, all buildings in the complex had the requisite permissions/approvals of the local Gram Panchayat. Enclosure ‘4’ (Refer Photograph Nos. 2, 2 – 2)

The Structural Audit Report of building No. 1 – 8 was studied.  From the report it is found that the structure is designed for a loading class 400 as per I.S. 875 and is in usable condition with proper upkeep and maintenance of utilities.

OUR ANALYSIS OF THE BUILDING COLLAPSE

The building has collapsed due to structural failure of a few members.  We have corroborated the data/ information made available to us, our visual inspection of the structural members, siate conditions and the testing results of the soil samples, which were shared with us by the Geotech experts as well as the test reports of structural members of various buildings in the complex.

After the examining the soil stratum at the footing level, the proximity of building drains between two buildings (such drains were in clogged condition around the adjoining building at the time of our visit) coupled with heavy rain in July 2013 during the period of collapse it is quite possible that some of the footing / footings might have settled due to the Subsidence of soil underneath.  This possibility is well reasoned in their report dated 30-11-2013 by the Geotech experts.  Enclosure ‘5’ (Refer Photograph 1 – 2, 4 – 3).

Such subsidence / settlement of one or more footings is/are enough to cause structural failure of columns above, thereby resulting in collapse of the structure.

Such effects are sudden and occurring without adequate warning.  (In the past, I have witnesses such similar accidents of building collapse, at Govinda Building at Bandra (E), Navre Building at Sion, Some years back).

CONCLUSION –

Based on the analysis of the facts, circumstances, documents and structural and soil test reports made available to me, I am of the opinion that subsidence/settlement of portion of the land below one or a few of the footings is the most cause for failure of the structural members which has resulted in collapse of building.”

11.     These reports were forwarded by the letter dated 20.01.2014 to the Divisional Manager of the Insurance Company, apprising them of the said reports and requesting the surveyor to continue the survey.  A similar letter was also dispatched to the surveyor requesting him to visit the site in order to segregate the salvage and advice for its disposal.  The complainant also requested for copies of the reports tendered by the surveyor, if any.  The surveyor did visit on 08.04.2014 which was acknowledged by the complainant in the letter dated 28.05.2014 sent to the surveyor.  Through the said communication, the complainant sent the information with regard to the status of the building, its plan and other documents, including three reports referred to above, and also intimated that they were not in possession of any structure test report for the structural members of the building I-12.  It was also mentioned in para-10 of the said letter that since they are provided with such test reports, the same shall be made available.  What is more noticeable in the said letter is that the complainant clearly agreed that the agencies that have submitted their expert reports have not carried out any structural tests.  Since the said letter gains significance in the present case, the same is extracted hereunder:

“Date : - 28.05.2014

Mr. Atul C. Shah

D/2015-212, Zalawad Nagar,

Juhu Lane, Andheri (West)

Mumbai-400058

Sub: - Claim under Insurance Policy No. 251100/11/13/31/00000177, issued by National Insurance Company, due to collapse of our Arihant Complex Bhiwandi warehouse building on 03.07.2013.

Dear Sir,

          We refer to your letter of requisition, dated 08.04.2014.  We thank you for your visit, dated 08.04.2014 during which you have inspected the salvaged stock. The condition of the stock was verified by you earlier also and we have discussed the efforts taken by us to salvage the maximum possible stock especially in light of the fact that for a long time we were not given access to the site by the police, fire brigade and the local panchayat.  Yet, we have managed to salvage goods valued at Rs.30,72,473/- out of which we have repacked certain stock and managed a recovery of Rs.1,70,485/-

          Over the past 10 months we have submitted substantial information to support our claim. With reference to your present requisition, our submission are as follows.

1. Architectural plans/drawings of all floors at the time of incident with approvals from respective authorities are enclosed collectively as Annexure ‘A’.  We are not in possession of any structural drawings.  We have enquired with the Developer, M/s. Arihant Corporation, Bhiwandi also.  However, the Developer informed us that the structural drawings are not available with them.

2. Copy of duly certified document for the land including 7/12, N.A., Title etc., is enclosed as Annexure ‘B’.

3. The approved building drawing bears the name of RCC consulting Engineer.  We are not in possession of any document for appointment of Architect & RCC consultant. However, the endorsement of RCC consultant’s name on the approved drawing should hopefully suffice.

4. We are not in possession of any document confirming the appointment of contractor at the time of original construction of the building.  Our enquiry with the Developer for the document also proved futile, as even they do not have the document.

5. Specifications of materials used in the construction are mentioned in Report dated 30.11.2013 prepared by Sardar Patel College of Engineering and the Structural test report dated 03.09.2013 prepared by M/s. Vijna Consulting Engineers Pvt. Limited enclosed as Annexure ‘C’.  This test report is related to tests carried out on another building viz. I-8 in the same Arihant complex, Bhiwandi.

6. We have already submitted copy of Geotechnical investigation report dated 30.11.2013, prepared by Sardar Patel College of Engineering, on 20.01.2014 along with Consulting Structural Engineer S.S. Bhat’s Structural Inspection report, to your office.  Both these reports are also submitted to National Insurance Co. Ltd. on 20/01/2014.  We hope you affirm the same.

7. We are not in possession of certified copy of material test certificate – cement, sand and reinforcement.  However, we hope the structural test report submitted by us as Annexure ‘C’ confirms most of the information you are looking for.

8. We are not in possession of details of concrete mix used in original construction of the building.  However, we hope the structural test report submitted by us as Annexure ‘C’ confirms most of the information you are looking for.

9. Copy of the Building stability certificate issued by R.R. Consulting Engineers is enclosed as Annexure ‘D’.

10. We are not in possession of any structural test report for tests carried out the Structural members of Building I-12.  We have approached the builder and the police, who flatly refused to provide us copy of the structural reports obtained by them.  We have approached the local Panchayat and we are hopeful that they will hand over a copy of the structural test report available with them.

11. Copy of the Local Gram Panchayat’s permission including the OC certificate is already enclosed as Annexure ‘A’.

We are not in possession of any structural test reports as mentioned by you.  As mentioned above, the Developer is not co-operating with us and hence they have not provided us any structural test report that they have carried.  We are requesting the Gram Panchayat to provide us copy of the report for structural tests carried out by them.

We agree that the 2 agencies that have submitted their expert reports have not carried out any structural test reports.  However, they have carried out geotechnical tests, which were relevant to establish the soil behavior and they have given their opinion on the behaviour of the structure due to the soil failure.

We note your advice on the liability for deterioration of damaged items.  However, we totally deny that there has been any delay on our behalf to take decision for the disposal of the salvage.  Kindly refer to our several letters dated 29/07/2013, 27/8/13, 03/10/13, 20/01/2014 & 18/02/2014 to your office as well as the insurer’s office.  We have informed both your offices that the salvage will deteriorate if early decision is not given for its disposal.  Unfortunately, we did not receive any response from the insurers nor from your office.

You have personally inspected the care taken by us to preserve all the damaged items.  You will agree that we have taken utmost care to avoid any deterioration of the salvage.  We once again request you to take decision for its disposal as the salvage is occupying valuable storage space.  We have also borne and paid rental charges for storing the salvage.

We assure you of our committed co-operation to enable you to complete our claim assessment.  Its been almost 10 months since the date of loss and we have not received any financial relief. We, therefore, request you to complete the claim assessment at the earliest or atleast recommend reasonable On-Account payment of Rs.1.5 crore which will give us required financial relief.

We await your positive response.

Thanking you,

Yours truly,

For Nissan Enterprises Limited

Sd/-

Director

Encl: 1. Annexures ‘A’ to ‘D’ as mentioned above.

Copy to National Insurance Co. Ltd.”

12.     The Insurance Company deployed Veermata Jijabai Technological Institute, Mumbai for carrying out technological tests that was performed by Mr. K.L. Savla.  The said report dated 04.04.2014 has been filed as Annexure R-12 along with the reply which also contains several photographs.  The report was supplemented with details vide letter dated 11.04.2014.  The said letter is very much relevant as it is a report by a Consulting Structural Engineer and has a bearing on the present case.  The same is extracted hereunder:

“K.L. SAVLA

Consulting Structural Engineer & Valuer                          ….

….

To,

Ref.:  Er. Atul C. Shah,

          Insurance Surveyor, Loss Assessors & Investigators,

          Govt. Approv Valuer

          15, Madhav Nagar,

BH Merwans Cack Shop, Above Pankaj Electronics,

S.V. Road, Andheri (W),

Mumbai-400058

Sub:   Cause of collapse of buldg No I-12 at Shree Arihant

          Complex, Reti Bunder Road, Thane – Bhiwandi Road,

          Koper Village, Bhivandi-421302.

Dear Sir,

This is refer to our joint meeting with you meeting on 4^th April, 2014. I will offer my technical services as follows: No I-12 at Shree Arihant Complex, Reti Bunder Road, Thane – Bhivandi Road, Koper Village, Bhivandi-421302.

I conclude the reason for collapse of structure is due to following main reasons:

1. Faulty structural Design
2. Very poor execution of construction and violated all rules of IS code.
3. Heavy corrosion to enforcement.
4. The sequence of collapse was settlement of one or more footing Ref photo nos P-7,P-8,P-9,P-10.  Stirrups in column was corroded and insufficient hook length column slender ratio has increased and column gave way, thereby entire structure must have collapse.

Sd/-

11/04/2014

Thanking you

K.L. Savla Structural Engineer & Valuer

Date: 3^rd April 2014

_________________________________

Reasons for collapse of Building No I-12 at Shree Arihant Complex, Reti Bunder Road, Thane – Bhivandi Road, Koper Village, Bhivandi – 421302.

Status of Structure at the time of collapse:

It was observed that existing structure was R.C.C. frame structure with ground and one floor.  Construction of R.C.C. column on 2^nd floor was in progress when building collapse. (Ref. photo mark P-13(a),13(b),14,15,16,17.

My technical observation are as follows:

FOOTINGS:  The footing are slope footing.  The minimum thickness specified in IS-456 is 15 c.m. ref Photo No. p-6,P-7,P-8,P-9 & P-10 which clearly indicate instead of concrete stone boulder are used, which violate the specification mention in IS Code.

PLINTH BEAMS :  Concrete three sample by core were taken from plinth beams, Ref. photo no P-2.  The comprehensive equivalent cube strength were 3.82 N/mm2,5.2N/mm2 and 11.45 N/mm2.  Out of these highest reading does not satisfy IS-456 Code!!!. Ref concrete text result by V.J.T.I. Institution. Ref Photo No. P-1,P-2.

BOND STRENGTH : Due insufficient cover to concrete and heavy corrosion the bond strength between reinforcement and concrete was lost.  Due to this the frame structure had lost the strength.  In such case structure cannot sustain. Ref,. Photo no P-4,P-5.

QUALITY OF CONCRETE: Concrete quality used for structural members was of very poor quality.  It appears that saline water had been used.  Due to this concrete quality results are very poor.  Ref Photo no p-3,P-4. Also ref concrete test result by V.J.T.I Institution.

STRUCTURAL DESIGN OF STRUCTURE : The hook of the stirrups are less than specified in Is 456.  In column the pitch (spacing) of stirrups are much more than specified The development length.

CORROSION TO REINFORCEMENT : There was very heavy corrosion to reinforcement, due to this there was loss in cross section of reinforcement bars As well as loss in cross effective section of concrete specially stirrups of column and beams Ref photos nos P-4,P-5,P-7,P-8,P-9,P-10,P-11,P-12.

CONCLUSION:

I conclude the reason for collapse of structure is due to following main reasons:

1. Faulty structural design.
2. Very poor execution of construction and violated all rules of IS code.
3. Heavy corrosion to reinforcement.
4. The sequence of collapse was settlement of one or more footing Ref photo nos P-7,P-8,P-9, P10. Stirrups in column was corroded and insufficient hook length column slender ratio has increased and column gave way, thereby entire structure must have collapse.

Consulting Structural Engineer & Valuer

Sd/-

K,L,Savla

…”

13.     The surveyor Mr. Atul C. Shah intimated the complainant through the letter dated 08.04.2014 demanding certain documents including the documents relating to the construction of the building.  It was also noted therein that in the technological report submitted by the complainant it was found that none of the testing agencies had carried out the test of RCC structural members for its strength.  The surveyor requested the complainant that in case it has been carried out, a copy of the same may be furnished.

14.     No such further information was tendered and the surveyor submitted his final survey report on 02.06.2014.  The same is on record and it recites that the building was constructed as a ground floor structure only at the initial stage in the year 2004 by M/s Arihant Developers.  The same builders constructed the first floor, whereupon the complainant’s family members purchased three of the Galas which are presently in question.  The survey report also recites that the building was weak and in spite of this, an additional floor i.e. a second floor on the existing building was being constructed which mounted pressure on the structure.  According to the surveyor, the building plan was improper, the pillars were weak and certain unplanned pillars were also constructed.  It was also observed that there was no legal sanction for the construction of the second floor which was underway on the date when the accident happened. The surveyor carried out verifications and drew his conclusions after studying the technological reports submitted by the complainant as also the report of Mr. K.L. Savla that has been extracted hereinabove.  The cause was analysed and it was observed as follows:

“CAUSE :-

Initially during the discussion with the Insured, it was informed to us that the Insured were not knowing the cause of collapsed of building and informed us that the building was collapsed suddenly.

As we were having instruction to carry our Preliminary Survey only, from the Insurer, we submitted our Preliminary Report after our first visit and not gone in much depth of the claim, after submission of our Preliminary Report.  But at the same time the Insured were already informed by us to carry out the Test result of Structural members.

To arrive at the cause/s of the failure of structure, the Insured have appointed 2 structural engineers and got 2 reports.  Both these Reports are silent about the Structural Strength – Quality of Structural Members.  None of Reports are giving the exact cause of failure and mainly stating may be due to settlement of soil, due to various probable reason/s.

We are also surprised to note that that none of these 2 structural engineers have concentrated on quality of concrete of Structural members of the building.  It appears that both these Structural Engineers had worked, as per the instruction from the Insured, to get the details of soil only.  But this is not the way to work by the Independent Structural Engineers.  They have to work looking at all angles. 

But when we were instructed to carry out the Final Survey, on 14-03-2014, we again contacted the Insured as well as Structural Consultant Mr. K L Savla, who informed us that he has been called by the Insured and visited the site along-with Insured and collected 3 nos. of cores – concrete of structural members.

But due to one or other reason/s, the Insured did not proceed with Mr Savla.  When we contacted Mr. Savla, still the samples were with him and these were got tested the cores, which were collected by Mr. Savla, when at the initial stage, called by the Insured themselves.  These cores were tested at V J T I College ( Original Test Report is attached with the Report of Mr. K L Savla ).  The test report, shows the compressive strength of the concrete were too less, then the require strength i.e. bad quality of materials & workmanship, was the reason of collapsed of building.

Thus overall we are concluding that the building is collapsed due to bad quality of structural members and/or bad workmanship.

The Insured’s appointed Structural Engineers had also given various reasons, like leakage of drainage line, erosion of soil, settlement of soil, foundation resting on heterogeneous soil, soil may have been washed away, Drain in the surrounding area of the building may have clogged, Soil below the foundations could have softened/weakened leading etc..

These are the reason/s for the settlement of land ( falling under exclusion ).  None of these cause/s falls under the purview of the Policy perils and hence in our opinion the claim is not tenable under the policy, issued to the Insured.  Hence we are closing the file of the same claim as NO CLAIM.

….                                   …..                                  ….”

15.     The surveyor also mentioned that for the other insured in the same premises, some survey had been conducted at the instance of New India Assurance Co. Ltd. and United India Insurance Co. Ltd. but no details were available in respect thereof.  They ultimately opined that the policy is a Floater Policy and in spite of repeated reminders, the insured have not submitted either the policy report, panchnama or any report from the Fire Brigade or from any Government Authority or Department.

16.     On the submission of this report, the claim was repudiated by the Insurance Company that was communicated on 07/18.09.2015 which is extracted hereunder:

“TO

The Nissan Enterprises Ltd.

B-41, Giriraj Industrial Estate

Mahakali Caves Road

Andheri (E),

Mumbai

400093

Re:    LOSS ON 04.07.2013 UNDER FIRE POLICY

A/C M/S NISSAN ENTRPRISES LTD.

POLICY NO. 251100/11/13/3100000177

PERIOD: 18.04.2013 TO 17.04.2014

OUR CLAIM NO.251100/11/13/3190000049

Dear Sir,

          We refer your intimation of the claim and appointment of surveyor for loss to the building due to collapse vide mail dated 04.07.2013.

          Subsequently, we appointed Shri Atul Shah for conducting survey and assessment of the loss on 05.07.2013.

          The surveyor vide his report dated 02.06.2014 supported by structural engineer’s report of Shri K.L.Savla, mentioned that cores of concrete taken from three different structural members tested at VJTI college, Matunga, Mumbai found against minimum requirement of the strength.

          As per Mr. Savla’s report the collapse of the structure is due to following reasons:

1. Faulty structural design
2. Very poor execution of construction and violated all rules of IS code
3. Heavy corrosion to reinforcement
4. The sequence of collapse was settlement of one or more footing

          The surveyor Shri Atul Shah vide his report dated 02.06.2014 concluded that the loss is not falling within the scope of the policy and the claim is not tenable.

          Based on the report of the surveyor as well as the report of structural engineer as stated above, the loss is falling under exclusion (d) “defective design or workmanship or use of defective materials” under insured peril-viii “subsidence and landslide including rock slide”

          In view of the above, the competent authority has repudiated the above claim.

          We regret for inconvenience caused to you in this regard.

                                                                 Sd/-

                                                          Pravin Wagle

                                                                (AM)”

17.     The complainant has also filed in its rejoinder the details of the stock that was stated to have been lost in the accident along with claim form.  There are two other documents which need to be mentioned and are brought on record along with the rejoinder and are of the year 2016.  The complainant in paragraph-7 of the rejoinder has stated that they also engaged the services of IIT, Department of Earth Sciences, Mumbai to tender a report in respect of the status of the land over which the building was constructed.  The IIT submitted that report on 11.07.2016 that has been brought on record.  The said report recites that the objective of the survey was to conduct technical resistivity survey to investigate the subsurface structures and variations in the subsurface at the location in question.  The IIT report also refers to the technological report of Sardar Patel College of Engineering, Munshi Nagar, Andheri (W), Mumbai and the report of Mr. S.S. Bhat that were relied on by the complainant.  The said report has photographs and it demonstrates that it is only the status of the subsurface stratum that was investigated finding out the status of the soil through various scientific methods.  One of the photographs at page 88 of the rejoinder reflects the photograph of the collapsed building.  The conclusions drawn in para-6 of the said report are extracted hereunder:

“6. Important Conclusions

The resistivity survey data was acquired using Wenner configuration for four profiles.  All profiles were not of the same length and is due to the debris lying at one end of the site which prevented from acquiring data for the entire lengths of the site.  The apparent resistivity data was modelled, inverted for resistivity values and finally interpreted for geologic models of the subsurface.  The inversion was done to find the optimal solution satisfying the data in a quasi-linearized manner.  The resulting pseudosections were plotted and variations were discussed for each profile.

The pseutosections showed that the entire study region is indicative of low resistive zones in the subsurface of north and northwest regions.  The resistivity values suggests presence of water or soil saturated with water.  This can be due to water seeping in from open sewage which is located in the northern side of the site.  The site is also blocked from the western side which increase the possibility of water seepage into the study area and this is also clearly reflecting in the subsurface low resistivity values.

The site also exhibits high resistive zones which could be due to the debris (concrete wall or roof material) of the collapsed building that may have been underlain and compressed due to constant movement of trucks on the surface.

Figures 7 and 9 very clearly indicates the existence of water or soil saturated with water zone extending in both vertical and horizontal direction as compared to other profiles (Figure 11 and 13) towards the roadside.  The modelled and interpreted profiles sections obtained from the resistivity survey support the study of Sardar Patel Engineering College and enhances their findings of subsidence as the main cause of building collapse.

Figure 15 supports the resistivity survey study.  This figure shows that portions of the building above zones indicative of deeper water zones (regions of very low resistivity) collapsed first and subsequently the roof.  This happened because of the loss of support due to easy rush of water and migration of ground material inviting subsidence and subsequent collapse.” 

18.     The conclusions drawn are clearly to the effect that the portions of the building collapsed first and subsequently the roof that happened because of the loss of support due to easy rush of water, and migration of ground material, inviting subsidence and subsequent collapse.

19.     This report seems to have again been sent by the complainant to the earlier Engineer Mr. S.S. Bhat, who indicated that the report of Mr. K.L. Savla and that of the surveyor Mr. Atul C. Shah have considered structural weaknesses whereas there is a contribution of subsidence in the collapse of the super-structure.  He approved of the report given by the IIT Mumbai.  The said letter dated 14.07.2016 is on record and reference to the same is important as same has been filed along with the rejoinder in respect of such documents that have been brought on record and are of 2016.  The said documents were not either before the surveyor or the Insurance Company at the time of repudiation.

20.     It is on the strength of these facts that learned counsel for the complainant has advanced her submissions contending that subsidence was the main cause of the collapse which has been proved with the aid of the reports that have been brought on record, and there was no structural defect at all in the building which is sought to be attributed by the opposite party for justifying the repudiation letter.

21.     She contends that the terms of the policy clearly covers loss due to subsidence and has invited the attention of the Bench to the terms of the policy, particularly Clause VIII, which is the clause that is being relied on by the Insurance Company as well.  Clause VIII is extracted hereunder:

“VIII.  Subsidence and Landslide Including Rockslide Loss, destruction or damage directly caused by Subsidence of part of the site on which the property stands or Landslid, Rock-slide excluding:

1. The normal cracking, settlement or bedding down of new structures

2. The settlement or movement of made up ground

3. Coastal or river erosion

4. Defective design or workmanship or use of defective materials

5. Demolition, construction, structural alterations or repair of any property or groundworks or excavations.”

22.     The contention raised is that the exclusion clause does not apply, inasmuch as, there is no defect in the design or workmanship or use of defective material so as to exclude the risk coverage.  The submission is that the repudiation is incorrect and the defence taken in the written version is without any substance.

23.     Learned counsel also invited the attention of the Bench to the details of the stock that is said to have been destroyed to urge that the claim made for indemnification is justified and the entire amount should be reimbursed as there is a clear deficiency in service on the part of the Insurance Company.

24.     The said arguments have been opposed vehemently by Ms. Meenakshi Midha, learned counsel for the Insurance Company, who has urged that there is no iota of evidence led on behalf of the complainant to substantiate their stand of the cause of damage to the building, which according to the Insurance Company was due to the defect in the structure, its design and sub-standard quality.  She contends that the report of Mr. Savla that was obtained by the Insurance Company has already been brought on record and there is no rebuttal or any effective material to contradict the said report even before this Commission.  She submits that the complainant has admitted that the technological report submitted on its behalf did not contain any structural test analysis of the constructions as is evident from the recital in the letter dated 28.05.2014.  Even thereafter no attempt was made to offer any such material and it is almost more than a year after the repudiation in September 2015 that the complainant through the rejoinder has introduced the report of IIT Mumbai which also does not relate to any analysis of the structure and its strength or weakness.  She therefore submits that in the absence of any such evidence to substantiate the claim and contradict the evidence led by the Insurance Company, the complainant is not entitled to any relief.  It is urged by her that the Insurance Company has rightly invoked the exclusion clause and has proved that the structure and the building suffered from defects of design, workmanship and sub-standard quality.  This onus having been discharged by the Insurance Company, there is no rebuttal by the complainant nor any material brought on record to contradict the same.  Consequently, the exclusion having been proved to have been rightly invoked, the complaint deserves to be dismissed.

25.     Having considered the submissions raised, so far as the delay in submission of report is concerned, it is evident from the communications made between the surveyor Mr. Atul C. Shah and the complainant that it was for quite some time that the surveyor had to wait for the submission of the technological reports by the complainant.  The same was received as late as 2014 and then the surveyor after consulting all the reports and conducting an in-depth study submitted the same before the Insurance Company.  The claim was therefore repudiated.  This entire correspondence and the period taken in collecting material therefore cannot in any way amount to a lapse on the part of the surveyor in submitting the report before the Insurance Company.

26.     It is however true that the Insurance Company repudiated the claim only after the filing of the present complaint and to that extent learned counsel for the complainant is correct in her submissions that delay was caused in the final decision making process by the Insurance Company.

27.     Nonetheless, on the merits of the claim, the entire bone of contention is on the issue of the structural strength of the building in question.  There can be no doubt that this was a case of subsidence in the first call and the soil appears to have sunk as is evident from the reports.  The level of sinking of the soil in all probability did contribute towards the building getting affected but it is probable that this may have occurred on account of the overloading of the building with the construction of the second floor which was going on at the time when the incident happened.  It is for this reason that the Insurance Company carried out the structural analysis through a scientific report which indicates faults in the structural design and workmanship as well as sub-standard material being used that accounted for the collapse of the building.  Had the constructions been sound, it was quite possible that the building would not have crashed causing loss to the goods stored inside it.  The structural defects of design and workmanship are clearly excluded under the subsidence clause extracted hereinabove.

28.     It is here that the report of Mr. K.L. Savla dated 04.04.2014 gains importance.  Mr. Savla has substantiated his report with photographs and with clear-cut findings that have been extracted hereinabove concluding that there was faulty structural design that violated the IS code.  He has also observed that there was heavy corrosion to the reinforcement of the material.  There was insufficient hook length column, the ratio whereof was increased, as a result whereof the columns gave way.  The details have been indicated in the report quoted hereinabove.  It was open to the complainant to have countered the same or brought-forth any material or experts even before this Commission to dislodge the findings contained in the expert report of Mr. Savla.  The complainant has failed to do so and hence there is hardly any reason not to accept the probabilities indicated in the said report of Mr. Savla.  Coupled with this, it is admitted to the complainant that it had neither obtained nor submitted any structural analysis report of the building in question. It is also evident that on the date of the collapse, the second floor was also being constructed about which doubts had been expressed with regard to their appropriate sanction by the competent authority.  Nonetheless, the fact that the constructions were going on at the second floor and the building was being loaded with additional structure has not been disputed. This overloading of the structure which already had a weak structural construction in all probability might have caused the sinking of the building.

29.     The stocks were insured in the premises which was on the first floor as described hereinabove.  The complainant could have made itself aware about the structural strength of the said floor before having proceeded to allow the raising of the second floor.  No such material has been placed to demonstrate that adequate care had been taken in this regard and, as observed above, the complainant has failed to provide any technological report to contradict the structural analysis report which is a technological test report carried out by Mr. K.L. Savla from the Veermata Jijabai Technological Institute, Mumbai. 

30.     Consequently, since the complainant has not been able to dislodge the exclusion invoked by the Insurance Company, the repudiation cannot be faulted with.  Hence, there is no deficiency in service on the part of the Insurance Company in repudiating the claim.

31.     The complaint lacks merit and is accordingly dismissed.