DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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M/s Saurav Chemical Limited, village Bhagwanpura, Dera-bassi Barwala Road, Derabassi, District Roop Nagar, Punjab.

                   ---Complainant

Vs

The New India Assurance Company Limited, S.C.O. No. 104-106, Sector 34/A, Chandigarh.

---- Opposite Party

BEFORE:    SH.LAKSHMAN SHARMA              PRESIDENT

MRS.MADHU MUTNEJA               MEMBER

           SH.JASWINDER SINGH SIDHU        MEMBER

Argued By:    Sh. Sunil K. Dixit, Counsel for Complainant.

Sh. Sukaam Gupta, Counsel for Opposite Party.

PER MADHU MUTNEJA, MEMBER

1.        This complaint relates to denial of the insurance claim filed by the Complainant with the Opposite Party. Briefly stated, the Complainant had purchased a Standard Fire & Special Perils Policy vide Policy No.350200/11/09/11/00000367, valid from 22.07.2009 to 21.07.2010, from the Opposite Party.

          On 18.05.2010, the top segment of the Boiler Chimney installed in the premises of the Complainant collapsed because of heavy rain and storm. No third party loss was caused. The Complainant has stated that it informed the Opposite Party immediately about the loss and made a claim of Rs.4,00,000/- approximately. Along with the intimation letter, the Complainant submitted all the relevant documents to the Opposite Party to substantiate its claim. The Opposite Party, however, rejected the claim on the ground that cause of loss does not fall within the policy coverage (rejection letter and conditions are at Annexure C-5 and C-6).

          The Complainant thereafter served a legal notice upon the Opposite Party to settle its genuine claim. The Opposite Party in reply to the legal notice stated that as the loss was caused due to structural deficiency and not due to storm, the claim was not payable. In order to prove its claim the Complainant obtained a meteorological report from the Regional Meteorological Centre, New Delhi. Alleging unfair trade practice and deficiency in service on account of repudiation of claim, the Complainant has prayed for payment of its genuine claim, along with interest and compensation, besides cost of litigation.

2.        After admission of the complaint, notice was sent to the Opposite Party.

3.        The Opposite Party in reply has taken preliminary objections to the effect that there is no defect, delay, deficiency or negligence on their part, as immediately on receiving intimation regarding the loss, the Opposite Party had appointed a Surveyor namely Mr.Rakesh Kumar Khanna to assess the loss. The Complainant was also asked to submit certain mandatory and necessary documents, along with clarifications for processing of the claim. When the Complainant remained silent for a number of days, the Surveyor sent a reminder dated 23.05.2010 once again asking the Complainant to supply the documents. However, as no documents were supplied, the Surveyor gave his final report, which reads as under:-

“That the claim falls outside the scope of the policy of insurance as the loss caused was not due to the storm as claimed by the Complainant but due to structural deficiency in the upper portion fallen out from the lower portion as it was observed by Surveyor that fallen section of Chimney did not match the galvanized sheet of the lower part/ section of Chimney also stairs were attached to fallen part of Chimney which were secured with rounded bar case for the safety while the lower intact part of Chimney had no rounded bar case. This shows that earlier also chimney had fallen down from the said place and was repaired and fabricated.”

(Annexure R-2)

          After receiving the Surveyor Report and considering every aspect of the case of Complainant, the Opposite Party has stated that it had rightly repudiated the claim of Complainant as it was outside the coverage of the terms and conditions of the insurance policy issued to the Complainant. Due intimation to this effect was also given to the Complainant vide letter dated 07.10.2010 (Annexure R-3).

          On merits, Opposite Party has admitted the issuance of the insurance policy to the Complainant. The Opposite Party has also repeatedly referred to their preliminary objections, while replying to each averment of the present complaint in their para-wise reply. Thus, claiming no deficiency in service or unfair trade practice on their part, the Opposite Party has prayed for the dismissal of the complaint.    

4.        Parties led evidence in support of their contentions.

5.        We have heard the learned counsel for the parties and have perused the record.

6.        The case of the Complainant is that despite being a beneficiary of a Standard Fire & Special Perils Policy issued by the Opposite Party, its genuine claim had been denied. The Opposite Party has taken the stand that the claim is not payable in terms of the Surveyor’s Report, as well as in terms of the fact that the Complainant did not provide relevant documents to the Surveyor for processing the claim. The relevant documents demanded by the Surveyor deputed by Opposite Party to assess the loss included besides others; the estimate loss giving cost of repair/re-fabrication cost/ erection charges; original purchase bill of the damaged chimney; year in which factory was set up and boiler was put to operation; details of year wise capitalization values of all plant and machinery; clarify whether part of the original chimney was replaced earlier as it had been observed that the fallen section of the chimney did not match with the galvanized sheet of the lower part/ section of chimney. Also the stairs attached to the fallen part of chimney were secured with rounded bar case for the safety while lower intact part of chimney had no rounded bar case. The Surveyor had also asked for details regarding whether any repair/ replacement of the part of the chimney was done and the year in which it was done, along with bill; latest valuation of plant and machinery; proposed schedule for restoration of the damaged chimney and cost details (Annexure R-1).  

          All the aforesaid details were not provided by the Complainant either to the Opposite Party or the Surveyor. The Surveyor letter addressed to the Complainant at Annexure R-1 and the resultant report at Annexure R-2 is clear about these averments. The claim has been denied by the Opposite Party based on this report.

7.        Certain observations made by the Surveyor in his report at annexure R-2 with regard to cause of damage need to be reproduced here:-

“CAUSE OF DAMAGE:-

We do not agree that chimney had fallen down due to storm because of following reasons: -

A)      Where the factory of insured is situated many other factories are located in the close vicinity having long chimneys. All the chimneys in the surrounding were intact.

          xxx              xxx              xxx              xxx              xxx

                   xxx              xxx              xxx              xxx

E)       There was structural difference in the upper portion fallen out from the lower portion. It was observed that fallen section of the chimney did not match the galvanized sheet of the lower part/ section of the chimney. Also stairs were attached to the fallen part of chimney, which were secured with rounded bar case for the safety while the lower intact part of chimney had no rounded bar case. This shows that earlier also chimney had fallen down from the said placed and was repaired and fabricated.

F)       The breakage had taken place from the joint from where earlier repair was done.

These observations clearly indicate that chimney had fallen because of structural deficiency and because of storm loss as stated by insured”. 

          The Surveyor after analyzing the issue has assessed the loss to the Complainant at Rs.44,000/-. However, it is also stated in the report as under: -

“Any loss due to structural deficiency is not covered under the scope/ peril of policy, so loss is not payable.

Therefore insurers are not liable to indemnify the loss and claim is recommended as NO CLAIM. Enough time was given to the insured to provide documents/ clarification, but insured remained silent and nothing was provided.”

8.   Here, It would be just and fair to refer to the terms and conditions of the policy, appended by the Opposite Party, along with their reply at Page No.19. The relevant extract of which is reproduced hereinbelow:-

“STANDARD FIRE AND SPECIAL PERILS POLICY

(MATERIAL DAMAGE)

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:

          xxx              xxx              xxx              xxx              xxx

                   xxx              xxx              xxx              xxx

d)       Defective design or workmanship or use of defective materials.

e)       Demolition, construction, structural alterations or repair of any property or ground works or excavations.”

          Hence, as per the terms and conditions of the policy also,  the loss caused due to the damage of the chimney is not payable in terms of the observations of the surveyor which have not been questioned by the complainant.

9.        The Hon’ble Supreme Court of India in Sikka Papers Limited Vs. National Insurance Company Limited, (2009) 7 Supreme Court Cases 777 has held:-

 “Insurance Act, 1938 – S.64-UM – Surveyor/ Loss assessor’s report – Weightage to be given – Held, though not the last word, yet there must be legitimate reason for departing from report – No infirmity found in Surveyor’s report and therefore held, Insurance Company rightly admitted claim as per the report.”

          The Hon’ble National Consumer Disputes Redressal Commission in case New India Assurance Company Ltd. Vs. Rabindra Narayan, I (2010) CPJ 80 (NC) has held: -

“….Surveyor’s report being important piece of evidence, to be given weight and relied upon, unless proved unreliable.”

          In an another case Dabirudin Cold Storage Vs. New India Assurance Company Ltd. & Ors., I (2010) CPJ 141 (NC), the Hon’ble National Consumer Disputes Redressal Commission has held that:-

“…….Surveyor’s report being important document, cannot be easily brushed aside.”

          It is thus clear that the Surveyor’s report is final, unless challenged by either the Complainant or the Opposite Party with specific contentions and averments. The Complainant, in the present case, has not filed any written objections to the surveyor’s report, hence, the report is final and binding.

10.       The Opposite Party has denied the claim based on the report given by the Surveyor. Hence, we do not feel that the action of the Opposite Party in denying the claim of the Complainant is unjustified, as it is based on the fact that the Complainant has not provided relevant documents needed to assess the loss. It has been observed that the chimney was already damaged and there was a structural deficiency at the place of loss. 

11.       Hence, in view of above discussion, we deem it appropriate to dismiss the complaint. No costs.

12.       Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

29 August, 2012.                                            

Sd/-

(LAKSHMAN SHARMA)

PRESIDENT

Sd/-

 (MADHU MUTNEJA)

MEMBER

Sd/-

 (JASWINDER SINGH SIDHU)

MEMBER