Haryana

StateCommission

CC/111/2016

AMBUJA OVERSEAS - Complainant(s)

Versus

NEW INDIA ASSURANCE CO. - Opp.Party(s)

RECEIVED FROM NCDRC,NEW DELHI

15 Dec 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

Remand Complaint No.111 of 2016

Consumer Complaint No. 10 of 2009

Date of Institution: 08.05.2009/04.05.2016

Date of Decision: 15.12.2016

 

M/s Ambuja Overseas, Office at 15/9, DLF Industrial Area, Phase-1, Faridabad-121003, through its authorised signatory Axay Kumar Karan.

                                      Complainant

Versus

1.      The New India Assurance Company Limited, through its Manager/authorised signatory, Bajaj House, 4^th Floor, Nehru Place, New Delhi.      

2.      The New India Assurance Company Limited, through its Manager/authorised signatory, 1 & 2 Chowk, NIT, Faridabad.

3.      Earnest Builders Private Limited, through its Manager/authorised signatory, 6122/4, Pocket D-6, Vasant Kunj, New Delhi-110070.

          New Address:     # 654, Sector 16-A, Faridabad.

                             Opposite Parties

 

CORAM:             Hon’ble Mr. Justice Nawab Singh, President.

                             Shri B.M. Bedi, Judicial Member.

                             Shri Diwan Singh Chauhan, Member   

 

Argued by:          Shri Kapil Arora, Advocate for complainant.

Shri S.S. Sidhu, Advocate for opposite parties No.1 and 2.

None for Opposite Party No.3 (dispensed with).

 

                                                   O R D E R

 

B.M. BEDI, JUDICIAL MEMBER

 

          M/s Ambuja Overseas through its authorised signatory Axay Kumar Karan–Complainant has filed the present complaint with the allegation that the complainant is engaged in the business of export of readymade garments and has its unit at 15/9, DLF, Industrial Area, Phase-I, Faridabad. The complainant purchased a plot, raised construction, installed plant and machinery and started business. The complainant was insured with The New India Assurance Company Limited (for short ‘the Insurance Company)-Opposite Party No.1, vide Insurance Policy (Exhibit C-3) covering the period 19^th March, 2007 to 18^th March, 2008. The total sum insured was Rs.40,70,000/-. The description of risk mentioned in the policy reads as under:-

Sr.No.	Description of Property	Sum Insured (in Rs.)
1.	Building(s) Only	20,00,000
2.	Plant/Machinery and accessories i.   Generator ii.  Boiler iii. Tumbler Machine iv. Washing Machine	1,50,000 1,70,000 1,00,000    50,000
3.	Furniture, Fixtures and Fittings Furniture/Fixture/Computers Nos.2	2,00,000
4.	Category I Stocks On stock of Raw-material, semi-finished goods, finished goods, readymade garments	10,00,000
5.	Specific Items (on stock) On stock of sewing machine	04,00,000
	Total:	40,70,000

 

2.                M/s M.B. Mall Private Limited, 13/6, Mathura Road, Sector-32, Faridabad, is situated at the back of complainant’s unit.

3.                M/s Earnest Builder Private Limited-Opposite Party No.3 was engaged by M/s M.B. Mall (P) Ltd. for raising construction over their plot. The opposite party No.3 was also insured with The New India Assurance Company-Opposite Parties No.1 and 2 for a sum of Rs.50.00 lacs. While the construction of opposite party No.3 was in progress, on 21.06.2007 there was heavy rain, due to which the factory of the complainant collapsed and caused damage to the entire material, machinery, building etc. Daily Diary Report (DDR) Exhibit C-5 was lodged in Police Station Sector-31, Faridabad on 22.6.2007. The details of loss has been mentioned in para No.8 of the complaint. The total loss was estimated to Rs.52,63,394/-.

4.                The complainant lodged claim with the Insurance Company. The builder of the adjoining plot has also lodged claim with the Insurance Company through the complainant. Surveyors were appointed in both the claims, that is, one by the complainant and the other by the adjoining builder. Though surveyors assessed the loss, however the Insurance Company did not pay the claim. The complainant got issued legal notice (Exhibit C-9) to the opposite parties and thereafter filed complaint seeking insurable benefits to the extent of Rs.52,63,394/- alongwith interest and compensation etcetera.

5.                The Opposite Parties No.1 and 2 filed joint reply inter alia stating that the complainant is engaged in commercial activities and therefore does not fall within the definition of “consumer”; besides that the loss does not fall within the terms of the insurance policy.

6.                On merits, issuance of the policy and the amount of coverage was admitted. As regarding the loss due to rain, it was stated that the complainant be put to prove of the same. Lodging of DDR was admitted. It was stated that the loss fell within exclusion clause and thus was not covered under the terms of the policy.    The estimate of loss was also denied. It was admitted that surveyors were appointed who submitted their reports. It was also submitted that the owner of adjoining building also lodged claim alongwith complainant and on their request also surveyor was appointed. Denying the claim, dismissal of the complaint was prayed.

7.                The parties led evidence by tendering affidavits in support of their respective claims.

8.                Counsel for the parties have been heard. file perused.

9.                The Insurance Company having insured the complainant is not disputed. The insurance policy is on the file as Exhibit C-3/OPR-1. The policy being Standard Fire and Special Perils Policy is not disputed. The risk covered is also not disputed which has been reproduced above in paragraph No.1.

10.              The dispute is only as to whether the loss fell within the exclusion clause or not? It is not disputed that the loss was on account of heavy rains. The complainant got issued notice Exhibit C-9 through his counsel Shri Davinder K. Lubana. The opposite parties replied the notice vide reply Exhibit C-12.

11.              In paragraph No.7 of the notice, the complainant has specifically stated that the factory collapsed due to heavy rains and in response thereto in the reply, the answer is that it is matter of record. Paragraph No.7 of the notice as well as reply thereto is as under:-

“7.     That unfortunately, the above said factory had collapsed on 21.06.2007 around 6.00 am, due to heavy rain. My client had also lodged complaint regarding collapse of his building with all material and machinery with the concerned police station.”

Paragraph No.7 of reply:

“7.     That para No.7 of your notice is a matter of record.”

12.              It is not disputed that the Fire and Special Perils Policy covers the risk loss due to Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation, as per Clause VI of the policy which reads as under:-

“VI.    Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation.

Loss, destruction or damage directly caused by Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood or Inundation excluding those resulting from earthquake, Volcanic eruption or other convulsions of nature. (Wherever earthquake cover is given as an “add on cover” the words “excluding those resulting from earthquake volcanic eruption or other convulsions of nature” shall stand deleted).”            

13.              The only plea being raised by the opposite parties is that since the loss was due to Subsidence and Landslide, therefore, the loss was not covered.  The defence of Clause VIII of the policy is being taken, which is reproduced as under:-

“VIII.           Subsidence and Landslide including Rock slide.

Loss, destruction or damage directly caused by Subsidence of part of the site on which the property stands or Land slide/Rock slide excluding:

i)        the normal cracking, settlement or bedding down of new structures the settlement or movement of made up ground.

ii)       coastal or river erosion

iii)      defective design or workmanship or use of defective materials’

iv)      demolition, construction, structural alterations or repair of any property or ground works or excavations.”

14.              The contention is not attracted. The complainant got issued notice through its counsel to the opposite parties/Insurance Company and the Insurance Company replied to the said notice. The complainant has specifically mentioned in paragraph No.7 that loss was due to heavy rains and in reply thereto, the opposite parties through counsel did not deny this fact. Therefore, certainly loss was due to heavy rains which led to accumulation of water and consequential loss to the insured premises and the machinery installed therein etcetera.

 15.             The other defence is that the surveyor in his report Exhibit
Ops/R-5/C-6 has observed that the loss due to accumulation of water because of excavation was not covered.

16.              The contention is not tenable. The surveyor in his conclusion has given opinion as under:-

“(5)    The Survey

Due to heavy rains in the area in the last few days and particularly in the night between Jun 20 & 21, 2007, the soil which had not been excavated i.e. almost 20’ (20 feet un-excavated area) started eroding and exposed the complete building & the foundation with no support from its side.”

xxx

xxx

“During the course of our survey, it was further noted that this erosion of soil had not only taken place in this area, but also on other sides of the excavated area in varying intensities. This had led to exposure of risk of collapse of other boundary walls/buildings.”

“6.     Extent of Damage

The extent of damage to the building and contents was noticed to the extent possible and is as under:-

A)      Building

The RCC frame structure along its foundation has totally collapsed and complete building lay in form of heap of debris in the excavated area of MB Mall.

Even the land area in the premises of M/s Ambuja Overseas has been eroded and land fill almost upto 20 feet shall be required to bring the land in the position for next possible construction.

This, as could also be seen from the photographs is a TOTAL LOSS of the building.”

17.              The surveyor has rather estimated that the loss has occurred due to erosion of soil and due to subsequent landslide. The report as a whole is to be considered. The surveyor in Clause V of his report (reproduced above), has observed that the loss was due to heavy rains in the area.

18.              Although the surveyor has assessed the loss which appears to be justified and based on reasons. However, his opinion that it does not fall under the terms of the policy, cannot be accepted. The opinion of the surveyor to that extent cannot be held final word. It is settled principle of law that the assessment of loss by the surveyor is a pre-requisite for payment or settlement of claim but surveyor’s report is not the last and final word. It is not that sacrosanct that it cannot be departed from; it is not conclusive. The approved surveyor’s report may be basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured. Support to this view can be had from the judgment rendered by Hon’ble Supreme Court in Civil Appeal No.3253 of 202, New India Assurance Company Limited versus Pradeep Kumar, decided on 9^th April, 2009. 

19.              Thus, certainly the loss did not fall under exclusion clause and therefore was covered under the insurance policy issued by the opposite parties-Insurance Company. Hence, the complainant is entitled to be compensated by the Insurance Company.

20.              Coming now to the quantum of compensation, the surveyor in his report has assessed the loss to the extent of Rs.29,73,847/-. The surveyor has given detailed reasons while arriving at the figures while working out the loss. Therefore, in the considered opinion of this Commission, the complainant is entitled to  Rs.29,73,847/- alongwith interest at the rate of 9% per annum from the date of filing complaint till its realization; Rs.10,000/- on account of mental agony and harassment and Rs.10,000/- towards litigation expenses. It is ordered accordingly.  The Opposite Parties No.1 and 2 – The New India Assurance Company Limited have insured the complainant vide policy Exhibit C-3. Therefore, the Insurance Company is liable to indemnify the insured complainant. So, the opposite parties No.1 and 2 are directed to pay the awarded amount within two months from the receipt of copy of this order.  The entire amount be paid by the opposite parties within a period of 45 days, from the date of receipt of the order, otherwise, it will carry interest at the rate of 12% per annum, till realization and it calls for pointed notice that under Section 27 of the Act, if the opposite parties fail or omit to comply with this order, it shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to three years or with fine or with both.   

           

Announced 15.12.2016

(Diwan Singh Chauhan) Member

(B.M. Bedi) Judicial Member

(Nawab Singh) President

CL