BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, VELLORE DISTRICT AT VELLORE. PRESENT: THIRU. A. SAMPATH, B.A., B.L., PRESIDENT TMT. G. MALARVIZHI, B.E. MEMBER – I THIRU. K. DHAYALAMURTHI,B.SC. MEMBER – II CC. 20 / 2005 TUESDAY THE 19TH DAY OF OCTOBER 2010. The Ambur Co-operative Sugar Mills Ltd., Rep. by its Special Officer, Vadapudupet, Vellore District. … Complainant. - Vs – The United India Insurance Company Limited, Rep. by its Senior Manager, 11-A M.C. Road, Ambur, Vellore District. … Opposite party. . . . . . This petition coming on for final hearing before us on 9.4.2010, in the presence of Thiru. M.R. Ramanan, Advocate for the complainant and Thiru. P.K. Ramamurthy, Advocate for the opposite party and having stood over for consideration till this day, the Forum made the following: O R D E R Pronounced by Thiru. A. Sampath, President of the District Consumer Disputes Redressal Forum, Vellore District. I. The brief facts of the case of the complainant is as follows: The complainant is a registered Co-operative Society. It is engaged in the manufacture and sale of sugar. Unsold sugar in bags has to be stacked in our godowns. The sugar bags stacked in the godowns were insured against perils with the opposite party’s Insurance Company. The opposite party issued the Standard Fire and Special Perils Policy No.012101/11/03/00001 (Material Damage) covering the period from 1.4.03 to 31.3.04. The policy relates to sugar stock for a total value of Rs.35 Crores in godowns of the complainant covering damage and loss aginst risks of several perils, including flood and inundation and due to bursting and / or overflowing of water tanks, apparatus and pipes, among other causes. Godown would be opened when stocks in other godowns were moved out on sale. It is in practice that the first produced sugar bags are moved out first against release order to effect sales. This Sugar Godown with sugar bags remained closed and locked, as there was no necessity for moving out sugar bags from out of this godown, since first produced sugar bags were stacked in other godowns. During the first week of February 2004, when sugar bags in one of our Sugar godown named Cattle Feed Godown were to be moved for effecting delivery, the officials of the Sugar Mill noticed for the 1st time damage to several sugar bags stacked in the 1st and 2nd lower most layers due to water which was visible to necked eyes. The officials bonafide believed that damage to sugar bags could have been due to rain and water inundation which could have entered due to heavy rainfall that occurred during August 2003 and thereafter. Around 2500 Sugar bags were under wet condition, damaged as above. Immediately on noticing the damage, telegram was sent to the opposite party on 9.2.04 followed by confirmation by post. The complainant received the Claim Form from the opposite party and duly filled in, together with enclosures, claiming total sum of Rs.564552/- towards reprocessing cost of damaged 2504 bags of sugar. The opposite party sent the reply dt. 30.3.04 together with a copy of letter dated 24.3.04 of the Surveyor, calling for more particulars and the complainant sent the reply dated 6.4.04 duly acknowledged by the opposite party with copy sent to the surveyor. After receiving the letter dt. 12.6.04 the Surveyor had discussions on 29.6.04 with the officials at the Sugar Mills and as advised by the Surveyor, the complainant submitted revised estimate of the reprocessing cost for the damage caused to the stock of sugar, claiming a sum of Rs.477538/-. We estimated loss of sugar in reprocess @ 10% originally and revised it @ 7.5% as the surveyor felt that 10% of sugar loss is on higher side. So in order to have a smooth settlement of claim we have revised the reprocessing loss 7.5.% as per the views of the surveyor. 2. After the inspection by the Surveyor and the discussions he had with the officials of the Mills, it was found that the damage to the stock of sugar bags could be primarily on account of water seeping into sugar bags due to sudden bursting of water pipe line caused by pressure built up inside the pipe line and due to inundation during the incessant rainfall causing blockages in the pipe which runs on the northern side wall of the godown for a height of about 30 feet from the floor level of the godown. Therefore, as instructed by the Surveyor the letter dt.24.8.04 was sent to the opposite party pointing out the cause for damage and affirming the claim for Rs.477538/- . After a lapse of about 3 months the opposite party sent the letter dt. 24.11.04 repudiating the claim, purporting to be based on legal opinion obtained from their Panel Advocate. The two main reasons given for repudiation are that there was wanton delay in informing about the damage and that the cause for damage has been variously stated as done to inundation and then as bursting of water pipe lines that damaged the sugar bags. The repudiation of the claim for damages in unjust, unlawful and not tenable. The complainant sent the intimation about the damage caused by water to the sugar bags as soon as the same was noticed in February 2004. The sugar bags were found damaged due to water which could be seen with necked eye, the officials of the Mills bonafide believed that the damage to the sugar bags could be due to rainfall and inundation. The godown in question was kept closed and locked and opened only during 1st week of February 2004, when the damage was noticed for the first time, as the earlier produced sugar bags in other godowns were sold and dispatched. Secondly, after the Surveyor and the officials of the Mills together inspected the godown in question, there was evidence of bursting of water pipe line by which damage to sugar bags caused due to water splashing and seeping into the sugar bags. Without making any mind application and without taking any managerial decision, simply citing the legal opinion, the panel lawyer actually not knowing things what had happened and simply giving his opinion based on papers, the reasons thereon for repudiation being flimsy, false, litigable, unjust and intended only to dishonestly avoid their legal liability. Hence, the opposite party is to be directed to pay to the complainant the sum of Rs.4,77,538/- towards the loss and damage suffered by the complainant to the sugar bags and to pay a further sum at 12% per annum towards interest until payment. Hence the complaint. 3. The averments in the counter filed by the opposite party is as follows: The complainant filed under sec 11 & 12 of the C.P. Act by the complainant is not maintainable either in law or on facts. The opposite party do not admit any of the allegations made in the petition and put the complainant to the strict proof of the same. The allegations regarding the practice adopted by the complainant Company in moving out the stocked goods in its godowns are not admitted. At any rate the said practice had no consent from the opposite party. The complainant is not even able to give pin-pointedly as to the number of bags damaged due to rain & Water inundation and when exactly they happened. Even with regard to the number of bags damaged the allegations that “around 2500 sugar bags under wet conditions” are all vague. Admittedly even as per the allegations in the complaint there was rains during August 2003 and thereafter. It is the further admission of the complainant that immediately after noticing the damage telegrams were sent on 9.2.04. So it is obvious from their own allegations that they were not careful in checking the goods during the said period from August and thereafter. The policy conditions expect them that they should be alert and try to avoid such losses. Mr.Jaya Prakash was asked by the opposite party to survey the alleged loss caused and the same was without prejudice to the contention of the opposite party. The revised estimate of costs for the damages caused to the Sugar bags at the advices of the surveyor is not at all true. In case if it is decided that the company had to pay the amount what will be actual quantum to be paid, only then the report of the surveyor will be taken into account. Merely because the surveyor suggests some amount the complainant cannot immediately jump to the conclusion that the company is liable to pay it. The damage to Sugar bags due to the sudden bursting of the pipes caused by the pressure built-up inside the pipe line and due to inundation during the incessant rain fall causing blockages in the pipe. Even if the inundation of water due to rainfall causing blockages in the pipe which runs on the Northern Walls of the Godown, were the cause of bursting etc. the same could have been avoided if the complainant was careful in maintaining the building and the water pipes. As soon as the damage was noticed in February 2004 they informed the same to the opposite are all incorrect and misleading. 4. The repudiation by the Company is perfectly valid and the same is supported by convincing reasons. The complainant has not adhered to the Policy conditions namely that “on the happening of loss or damage to the insured goods they should have intimated the loss “forthwith” to the Company and should have filed the claim within 15 days after the loss or damage. In fact in their letters dated 9.2.04 and 28.2.04 they have significantly omitted to mention the date as to when they became wet or damaged. Initially the complainant came up with a story of Inundation of water. But when it was pointed out that the floor of the godown is well over 4’ of the ground level and the bags have been fully covered the complainant switched on to other possible modes, it is obvious that the complainant is not at all aware of the exact and precise cause for the alleged wetting of the sugar bags. Initially the complainant alleged inundation of water as the cause of wetting. Subsequently they have switched over of bursting of water pipe line caused by the pressure built up inside the pipes due to excessive rain fall causing block of the pipe which runs on the Northern side wall about 30’ from the floor level and caused the wetting of the bags. If that were to be true it is clear that the complainant has not taken the minimum care and caution in the maintenance of the building and allowed the pipes to rust and burst even for an average down-pour of rains. Hence it is clear that the callous negligence on the part of the complainant in the maintenance of the godown that was the reason for the wetting of the bags even if it were to be true. It is not at all an unexpected happening. Even if there has been a bursting of the pipes should have been informed to the opposite party for verification and admittedly the same has been trotted out as a last resort for the claim. Even if it were so it is a case of negligence of the complainant and hence the opposite party is not liable to pay the alleged loss. The complaint may be dismissed with costs. 5. Now the points for consideration are: (a) Whether there is any deficiency in service, on the part of the opposite party (b) Whether the complainant is entitled to the reliefs asked for?. 6. Ex.A1 to Ex.14 were marked on the side of the complainant and Ex.B1 to Ex.B10 were marked on the side of the opposite party. Proof affidavit of the complainant and Proof affidavit of the opposite party have been filed. No oral evidence let in by either side. 7. POINT NO. (a):- It is admitted facts of the parties that the complainant is a registered Co-operative Society and it is engaged in the manufacture and sale of sugar. Unsold sugar in bags stock for a total value of Rs.35 cores in the godowns of the complainant were insured with the opposite party, covering damages and loss against risks of several perils, including floods and inundation and due to bursting and / or over flowing of water tanks apparatus and pipes among other causes, covering the period from 1.4.03 to 31.3.04 and the opposite party issued the Standard Fire and Special Perils Policy No.012101/11/03/00001 ( Material Damage)Ex.A1. During the 1st week of February 2004, due to heavy rain and water inundation 2500 sugar bags were under wet condition, damaged in the godowns, the complainant sent a telegram Ex.B2, dt. 9.2.04 and a letter Ex.A2, dt. 9.2.04 to the opposite party. The complainant received the Claim Form from the opposite party and duly filled in together with enclosures, claiming total sum of Rs.5,64,552/- towards reprocessing cost of damaged 2504 bags of sugar. Based on the claim Form Ex.A4, about the damage of the sugar in bags, the opposite party has appointed Mr.G.P. Jayaprakash, Surveyor to assess the alleged damage sugar in bags and cause for the damage. The surveyor inspected the damage sugar bags in the godown of complainant and discussed with the officials of the mill and after perusing the particulars Ex.A7, dt. 12.6.04 Ex.A10dt. 26.7.04 submitted by the complainant, he submitted the survey report Ex.B9, with the opposite party on 30.8.04. After perusing the survey report, the opposite party repudiated the claim under Ex.A14, on 24.11.04. 8. The complainant contended that the Surveyor inspected the godown and found that the damage to the stock of sugar bags could be primarily on account of water seeping into sugar bags due to sudden bursting of water pipe line caused by pressure built up inside the pipe line and due to inundation during the incessant rainfall causing blockages in the pipe and the surveyor had discussions on 29.6.04 with the officials at the sugar mills and as advised by the surveyor, the complainant submitted revised estimate for the re-processing the cause for damage and thereafter the surveyor has filed a detailed report about the cause for the damage and affirming the claim of Rs.4,77,538/-. Without making any mind application and without taking any managerial decision, simply citing the legal opinion, the panel lawyer actually not knowing things what had happened and simply giving his opinion based on papers the reason thereon the repudiation being the filmsy, false litigable, unjust and intended only to dishonestly avoid their legal liability. 9. From the perusal of in repudiation letter Ex.A14, dt. 24.11.04 the opposite party stated that “On a scrutiny of the letter exchanged between the complainant and the Insurance Company it will be seen that you have not adhered to the Policy conditions namely that “on the happening of loss or damage of the insured goods, the complainant should have intimated the loss “forthwith to us and should have filed the claim within 15 days after the loss or damage. Further, initially the complainant came up with a story of Inundation of water, subsequently they have switched over plea of Inundation of water, to a case of Bursting of water pipes line caused by the pressure built up inside the pipe due to excessive rain fall causing the blockages of the pipes, which runs on the Northern side wall about 30” from the floor leverl and causing the wetting of the sugar bags. Thus it is clear that due to negligence on the part of the complainant there has been a seepage of water in the walls due to the bursting of the rusted pipes which was the result of complainant own negligence in not maintaining them in a proper condition. It is not an unexpected happening. Hence there is no question of invoking Clause VI of the policy to the fact of this case. 10. According to the complainant during the 1st week of February 2004 when sugar bags in one of our Sugar godown named Cattle Feed godown were to be moved for effecting delivery, the officials of the Sugar Mill noticed for the 1st time damage to several sugar bags stacked in the 1st and 2nd lower most layers due to water which was visible to necked eyes. Immediately, they have sent a telegram Ex.B2, dt. 9.2.04 to the opposite party stated that around 2500 Sugar bags kept in the Sugar godown are under wet condition, kindly depute a surveyor to assess the loss. Further, the complainant had sent a letter Ex.B3, (A3), dt. 28.2.04 to the opposite party stated that based on the complainant’s intimation dt. 9.2.04, the opposite party had sent Mr.G.P. Jayaprakash, Surveyor to their mills on 12.2.04 and he had also inspected the damaged sugar godown and surveyed the loss, request to kindly issue the claim form to proceed further in this regard. Thereafter the complainant received the claim form from the opposite party and duly filled it and sent to the opposite party along with enclosures on 18.3.04. From the perusal of Ex.A4 Claim Form with enclosure it is seen that the complainant claming total sum of Rs.5,64,500/- towards reprocessing costs damaged 2504 bags of sugar. It is admitted fact that the opposite party’s Surveyor Mr.G.P. Jayaprakash inspected the complainant’s sugar bags godown named Cattle Feed Unit Godown and had discussions with the officials of the mills, and after the assessment of the loss and cause for damage sugar bags, the surveyor submitted a report Ex.B9, dt. 30.8.04. before the opposite party’s insurance company. 11. From the perusal of surveyor report Ex.B9, the surveyor stated that during survey it is noticed that in godown No.7, where the damage had occurred, the sugar bags were stacked in 10 lots. Damages in each lot had been segregated and counted. As 2504 sugar bags damaged were ascertained. Therefore, total cost of processing charges per quintal is ascertained as Rs.182.57. One bag of sugar is 1 quintal (100 kgs). Therefore processing charges for 2504 bags is Rs.4,57,155/-. Furhter, the surveyor had made some special remarks that the insured is not aware of the exact date of loss, insured initially claimed that the loss is due to inundation of rain water, later they have switched over that the damage to sugar stock primarily due to sudden bursting of water pipe line caused by pressure built up inside the pipe line during incessant rainfall causing to blockage in the pipe. As per the policy loss directly caused by flood or inundation is covered. In this claim there is no such over flowing, neither there is no such flood nor any such inundation. Therefore there are violations of the policy conditions such as delay in intimation, ambiguity in the perils under which the policy covers, not knowing of the exact date of loss. 12. From the perusal of letter Ex.A5, dt. 30.3.04 along with the surveyor’s letter dt. 24.3.04 sent by the opposite party to the complainant, it is seen that the opposite party requested the complainant to furnish the details documents required by the surveyor. From the perusal of Surveyor letter, dt. 24.3.04 it is seen that the surveyor required the details statement about the rain water had damaged the sugar in closed godown and exact date of loss, and the insured has to explain which of the insured perils cover the damages sugar. Based on the above letters, the complainant had sent a detailed report Ex.B5, dt. 6.4.04 to the opposite party. From the perusal of report Ex.B5, dt. 6.4.04, it seen that the complainant furnished the detailed statement required by the surveyor that due to heavy rain mingled with strong wind, rain water inundated the godown and hence the sugar bags kept in the bottom layer of the lot, got wet condition and deteriorated. They have noticed the damage caused in the bottom layer of the lot only in the second week of February 2004 while delivering the stock. Immediately they intimated the same to the opposite party. Hence they informed that there is no intentional delay. Further, they stated that it is seen from the rain fall report, that the loss might have been incurred during the month of August 2003 (1.8.03), since there was highest rainfall recorded during the above month. Even now they did not know the exact date of damage. While lifting the upper bags for delivery, they have noticed the damage in February only. Hence they are furnishing the details of Sugar stock for the month of February 2004. Further, damage might have been caused due to one of the perils covered under Fire Policy to be more specific it could have been occurred due to STFI. Therefore it is clear that the complainant noticed the sugar bags kept in the bottom layer of the lot, got wet condition and deteriorated on in the 2nd week of February 2004 while delivering the stock. Immediately, they intimated the same to the opposite party. Therefore the complainant did not know the exact date of damage. But they stated that it is seen from the rainfall report that the loss might have been incurred during the month of August 2003, since there was highest rain fall recorded during the above month and due to heavy rain during the month of August 2003 mingled with strong wind, rain water inundated the godown and hence the sugar bags kept in the bottom layer of the lot, got wet condition. The opposite party has not denied that the contention of the complainant that there was highest rain fall recorded during the month of August 2003. The complainant noticed the damage caused in the bottom layer of the lot only in the second week of February 2004 while delivery the stock. Therefore there is no chance to know the exact date of damage from August 2003 to 2nd week of February 2004. During the survey the surveyor noticed that in godown No.7, where the damage had occurred, the sugar bags were stacked in 10 lots. i.e. damage of 2504 sugar bags were ascertained and the loss of assessment is Rs.4,57,155/-. Therefore the contention of the opposite party that there are violations of the policy conditions such as delay in intimation, ambiguity in the perils under which the policy covers not knowing of the exact date of loss is not acceptable. 13. Taking into account, with regard to the contention of the complaint and the counter as well as proof affidavit of the both parties, and from the documents Ex.A1 to Ex.A14 & Ex.B1 to Ex.B10, we have come to the conclusion that the opposite party’s insurance company wrongly repudiated the claim of the complainant, therefore we have come to the conclusion that the attitude of the opposite party herein, would have certainly committed deficiency in service. In view of Ex.B1 Insurance Policy, Ex.B4, Claim Form & Ex.B9, Surveyor Report the complainant herein is entitled a sum of Rs.4,57155/- for the reprocessing charges for 2504 Sugar bags from the opposite party’s insurance company, hence we answer this point (a) accordingly. 14. POINT NO. (b): - In view of our findings on point No.(a), the complainant herein is entitled to a sum of Rs.4,57,155/- for Insurance Policy and also to a sum of Rs.2000/- towards the costs of this complaint. Hence we answer this point (b) is also accordingly. 15. In the result, this complaint is partly allowed. The opposite party herein is directed to pay a sum of Rs.4,57,155/- under Ex.B1 Insurance Policy and Ex.B9 Surveyor Report. The opposite party herein is also directed to pay a sum of Rs.2000/- towards the costs of this compliant. The opposite party is hereby directed to pay the above said amounts within one month from the date of copy of receipt of this order, failing which, the complainant is also entitled to interest on the above said sum @ 9 % p.a from the date of default till the date of payment. Dictated to the Steno-typist and transcribed by her, corrected and pronounced by the President, in Open Forum, this the 20th day of October 2010. MEMBER-I MEMBER-II PRESIDENT. List of Documents: Complainant’s Exhibits: Ex.A1 - -- - X-copy of the Insurance Policy No.012101/11/03/001. Ex.A2- 9.2.04 - X-copy of the Telegram. Ex.A3- 28.2.04 - X-copy of the letter sent to the opp party requesting for issue of the prescribed Claim Form. Ex.A4- 18.3.04 - X-copy of the letter with Claim Form. Ex.A5- 30.3.04 - X-copy of Reply sent by the opp party together with a copy of Letter dt.24.3.04 of the surveyor. Ex.A6.1.5.04 - - X-copy of letter sent by the Surveyor. Ex.A7.12.6.04 - X-copy of letter by the complainant. Ex.A8- 2.7.04 - X-copy of Certificate of Analysis of Sugar issued by the Director, Sugar Research Institute, Ammundi. Ex.A9-6.7.04 - - X-copy of details of cost of reprocessing of wet sugar. Ex.A10-26.7.04 - X-copy of the letter together with enclosures submitted to the Surveyor. Ex.A11- -- - X-copy of Ack. Card. Ex.A12- 24.8.04 - X-copy of letter sent to the opposite party through courier. Ex.A13- 26.8.04 - X-copy of Courier Receipt. Ex.A14- 24.11.04 - X-copy of the letter of repudiation sent by the opp party. Opposite party’ Exhibits: Ex.B1 - .. - Policy. Ex.B2- 9.2.09 - X-copy of letter from the complainant to the opp party. Ex.B3- 28.2.04 - Letter from the complainant to the opp party. Ex.B4- 18.3.04 - X-copy of letter from the complainant to the opp party. Ex.B5- 6.4.04 - X-copy of the letter from the complainant to the opp party. Ex.B6- 24.8.04 - Letter from the complainant to the opp party. Ex.B7- 12.6.04 - X-copy of the letter from the complainant to the opp party. Ex.B8- 5.8.04 - Declaration. Ex.B9- 30.8.04 - Surveyor Report. Ex.B10- -- - Insurance Claim Form for Fire & Allied perils. MEMBER-I MEMBER-II PRESIDENT.
| | [ Hon'ble Tmt G.Malarvizhi, B.E] MEMBER[ Hon'ble Thiru A.Sampath, B.A., B.L] PRESIDENT[ Hon'ble Tr K.Dhayalamurthy, Bsc] MEMBER | | 
