1. Heard Mr. K.V. Girish Chowdary, Advocate, for the appellant and Mr. Dhruv Kumar, Advocate, for the respondent. 2. IFFCO TOKIO General Insurance Company Limited (the opposite party) has filed above appeal from the order of State Consumer Disputes Redressal Commission, Uttar Pradesh, dated 15.09.2015, allowing CC/10/2010 and directing the appellant to pay Rs.6851441/- with interest @9% per annum, from the date of filing of the complaint till the date of payment and litigation cost of Rs30000/-. 3. PNC Infratech Limited (the respondent) (the Insured) filed CC/10/2010, for directing IFFCO TOKIO General Insurance Company Limited (the appellant) (the Insurer) to pay (i) Rs. 6851441/- with interest @14.5% per annum under Regulation-9 till actual payment, as the insurance claim, (ii) Rs.50000/- as incidental expenses, (iii) Rs.40000/- as cost of the litigation; and (iv) any other relief, which is deemed fit and proper in the facts and circumstances of the case. 4. The complainant stated that the Insured was a company, registered under the Companies Act, 1956 and engaged in the business of construction of road and other like projects. The Insured was granted Rehabilitation Contract No.51/PD/SRP/2005-2006 dated 01.10.2005 by Public Works Department, Government of U.P., for rehabilitation works of State Highway-33 from Chainage 159.00 (near Kasganj) to Chainage 222.00 (Hathras). The Insured obtained “Contractor’s All Risk Policy” No.DZ/ICA/05-06/CB/000011/32010092 from IFFCO TOKIO General Insurance Company Limited (the Insurer), for the period of 09.11.2005 to 30.09.2007 + 12 months maintenance visit cover, for sum insured of Rs.265010339/- and Rs.20/- lacs, for Third Party Liability for the said Project. Modus operendi for construction of the road was that half of width of existing road was blocked for construction and remaining half of the width of road was opened for movement of traffic. There were torrential rains on 09/10.07.2006 and 27/28.07.2006. Unprecedented extra-ordinary rains resulted in inundation on the newly constructed road. There was a lot of traffic jam on the road, as such, newly constructed road was opened for traffic movement. Due to inundation and traffic movement, newly constructed road was damaged. The Insured intimated the loss to the Insurer, vide letter dated 23.08.2006. The Insurer appointed J.N. Sharma & Company, New Delhi as the surveyor. The surveyor visited the road site on 27.08.2006, inspected the damaged road, prepared inventory and took photographs. The Insured submitted claim form for Rs.14919330/- and supplied all the papers to assess the loss. The surveyor wrote a letter dated 04.08.2007 to the Insured, requiring its consent for unconditional acceptance of Rs.6851447/- as final settlement. As the settlement of the claim was unduly prolonged, the Insured gave its consent for that amount. The surveyor submitted its Survey Report dated 27.08.2007, assessing loss to Rs.10011120/- and loss payable as Rs.6851447/-. The surveyor assessed the loss on Bill of Quantity basis and not on Standard Data Basis, as prescribed by Ministry of Road Transport and Highways. The Insured wrote a letter dated 15.09.2007 to the surveyor, with its copy to the Insurer, for settlement of the claim. The Insurer wrote letters dated 15.10.2007 and 27.11.2007, asking the Insured to submit the proof of flood at the site of road. The Insured had already submitted Rain Records as maintained by Meteorological Department, issued from the office of District Magistrate, Hathras and the same document was again supplied. However, the Insurer vide letter dated 08.02.2008, repudiated the claim of the Insured on the ground that damage was not caused due to flood rather it was caused by (i) Defective design of the work, (ii) Use of defective workmanship and materials, (iii) Non-provision of an alternative route for traffic and (iv) The road was put in use. The Insured protested the letter dated 08.02.2008, vide its letter dated 24.03.2008 and stated that the surveyor, in its survey report has already found that the Insured was well-equipped with latest road construction machinery along with dedicated and committed technical professional/manpower. The grounds of defective design of the work and use of defective workmanship and materials, were incorrect. It was beyond their control to stop use of highway and divert the traffic on alternate road as it would have become major law and order problem on the spot. P.W.D. was closely monitoring the situation to avoid traffic jam on the highway. The Insurer vide letter dated 16.05.2008 informed that the matter was re-examined and it was found that the road was damaged due to (i) Monsoon rains, and (ii) Damage/peeling of the top surface of the asphalt was due to plying of vehicular traffic on wet road and resultant wear and tear, which falls under the Exclusion clause of the policy. Then the complaint was filed on 03.02.2010, claiming deficiency in service. 5. IFFCO TOKIO General Insurance Company Limited (the Insurer) filed its written reply on 28.01.2013, in which, the fact of obtaining “Contractor’s All Risk Policy” No.DZ/ICA/05-06/CB/000011/32010092 from the Insurer, has not been denied. The Insurer denied that rains on 09/10.07.2006 and 27/28.07.2006 had resulted in inundation on the newly constructed road by the Insured. The Insured deliberately caused delay in intimating the loss. As soon as, the Insurer received information of the loss on 24.08.2006, the surveyor was appointed on the same day. Although the surveyor assessed the loss but it was subject to admissibility of the liability. It has been denied that the Insurer ever offered for settlement of the claim. The Insurer vide letter dated 15.10.2007, asked the Insured to submit proof of flood and inundation in the area but no such proof was provided. Rainfall record was not a proof of actual flood and inundation. The Insured could have given photographs of flood and inundation. In fact, in the letter dated 23.08.2006, the Insured did not mention about flood and inundation. As the loss did not occur due to insured perils rather falls under Exclusion clauses, the claim was repudiated vide letter dated 08.02.2008. The representation made by the Insured dated 24.03.2008 was rejected on 16.05.2008. It has been denied that the grounds raised in repudiation letter dated 08.02.2008, were given up in the letter dated 16.05.2008. The Insured may be equipped with latest road construction machinery along with dedicated and committed technical professional/manpower but it; itself is not a proof that the construction was not defective. Delay has occurred due to reasons that the Insured took time in supply the papers, necessary for assessment of loss to the surveyor. The Insured claimed loss of Rs.11100000/- in the letter dated 23.08.2006, which was revised to Rs.14919330/- vide letter 17.02.2007. General Condition No.5 requires immediate information of loss on telephone or telegram. If information of loss is not given within 14 days of loss, then the claim was not admissible. General Condition Nos.3 and 5 were violated. In the present case, loss allegedly occurred on 09.07.2006 and 28.07.2006, while information was given on 23.08.2006 i.e. after expiry of 14 days. Exclusion Clauses “d” and “e” are attracted in the present case. The Insured admitted in the complaint that he had failed to follow the Modus Operandi. Government of U.P. through Chief Engineer, PDW was necessary party. There was no deficiency in service on the part of the Insurer. 6. The Insured filed Affidavit of Evidence, Additional Affidavit of Evidence of Ashwani Rawat and various documents. The Insurer filed Affidavit of Evidence Saikar Sarkar and various documents. State Commission, by impugned judgment dated 15.09.2015, held that heavy rains and inundation during 01.07.2006 to 15.08.2006 was proved from the Rain Records, maintained by Meteorological Department. The surveyor in his Survey Report dated 27.08.2007, found that on 9th and 28th July, 2006, there was heavy downpour, allegedly resulting flooding on road. The surveyor in survey report noted that the Insured was well-equipped with latest road construction machinery along with dedicated and committed technical professional/manpower. The grounds of defective design of the work and use of defective workmanship and materials, were incorrect. It was beyond their control to stop use of highway and divert the traffic on alternate road as it would have become major law and order problem on the spot. P.W.D. was closely monitoring the situation to avoid traffic jam on the highway. The Insurer could not adduce any evidence to prove that loss had occurred due to plying vehicular traffic on wet road and resultant wear and tear. The surveyor has assessed the loss, as such, the delay in information of the loss was immaterial. There was no defect of non-joinder of the party. On these findings, the complaint was partly allowed and the order as stated above was passed. Hence, the Insurer has filed above appeal. Both the parties have filed their written arguments also. 7. I have considered the arguments of the counsel for the parties and examined the record. Supreme Court in Galada Power and Telecommunication Ltd. Vs. United Insurance Company Ltd., (2016) 14 SCC 161 and Saurashtra Chemical Ltd. Vs. National Insurance Company Limited, (2019) 19 SCC 70, held that the ground, other than the ground taken in repudiation letter, cannot be permitted to be raised before the Court. In the letter dated 08.02.2008, the claim was repudiated on following grounds:- (i) Defective design of the work, (ii) Use of defective workmanship and materials, (iii) Non-provision of an alternative route for traffic and (iv) The road was put in use. In letter dated 16.05.2008, the Insurer took two more grounds, namely (i) The damage was caused due to monsoon rains, and (ii) Damage/peeling of the top surface of the asphalt was due to plying of vehicular traffic on wet road and resultant wear and tear, which falls under the Exclusion clause of the policy. 8. Section-1 Material Damage of the “Contractor All Risk Insurance Policy” provides as follows:- “The Company hereby agrees with the Insured (subject to the exclusion and conditions contained herein or endorsed hereon) that if, at any time during the period of insurance started in the said Schedule, or during any further period of extension thereof, the property (except packing materials of any kind) or any part thereof, described in the said Schedule be lost, damaged or destroyed by any cause, other than those specifically excluded hereunder, in a manner necessitating replacement or repair, the Company will pay or make good all such loss or damage upto an amount not exceeding in respect of each of the items specified in the Schedule the sum set opposite thereto and not exceeding in the whole the total sum insured hereby.” 9. The Insurer relied upon Exclusion clauses-d and e, General Condition-3, in repudiation letter, which are quoted below:- Exclusion to Section-1. (d). loss or damage due to faulty design. (e) the cost of replacement, repair or rectification of defective material and/or workmanship, but this exclusion shall be limited to the items immediately affected and shall not be deemed to exclude loss of or damage to correctly executed items resulting from an accident due to such defective material and/or workmanship. General Condition-3- The Insured shall at his own expense take all reasonable precautions and comply with all reasonable recommendations of the Company to prevent loss, damage or liability and comply with statutory requirements and manufacturers recommendations. 10. Supreme Court in National Insurance Company Limited Vs. Ishwardas Madan Lal, (2007) 4 SCC 105, held that burden of proof lay upon the Insurer to prove that exclusion causes will apply. In the present case, the surveyor in Final Survey Report dated 27.08.2007, found that total 12 numbers of chain-age were damaged i.e.-221, 220, 218, 217, 215, 214, 209, 208, 207, 206, 205 & 204. The construction of these chain-ages were started on 04.04.2006 and completed in June, 2006. According to the contract, design of the work, use of materials and workmanship were subject to approval and monitoring of Superintending Engineer, PDW, State of U.P. There is nothing on record that Superintending Engineer had ever raised any objection in respect of design of the work, use of materials and workmanship. The Insurer could not adduce any evidence to contradict these facts, which were verified by the surveyor. Grounds (i) and (ii) of the repudiation letter are based upon conjectures and surmises and in ignorance of survey report. 11. So far as violation of General Condition-3 is concerned, it requires for taking reasonable precaution. The Insured stated that it was beyond their control to stop use of highway and divert the traffic on alternate road as it would have become major law and order problem on the spot. P.W.D. was closely monitoring the situation to avoid traffic jam on the highway. The Insurer has not given any cogent reply of these statements. Use of the term ‘reasonable precaution’ does not envisage for performance of impossible act. As such grounds-3 and 4 of repudiation letter are also not correct. 12. In letter dated 16.05.2008, the Insurer took two more grounds, namely (i) The damage was caused due to monsoon rains, and (ii) Damage/peeling of the top surface of the asphalt was due to plying of vehicular traffic on wet road and resultant wear and tear. The damage was wrongly categorised as normal wear and tear. Under Section-1, the damage by any cause was insured peril as such these grounds were irrelevant. I do not find any ground to interfere with the order of State Commission. O R D E R In view of the aforesaid discussion, the appeal is dismissed. |
