PER SHRI. S.S.PATIL - HON’BLE  MEMBER :

1)        This is the complaint regarding the deficiency in service on the part of Opposite Party as it partly repudiated the insurance claim of the Complainant (claim of Rs.75,000/- only).

2)        The facts of the complaint as stated by the Complainant are that the Complainant has obtained Standard Fire and Special Perils Policy No.0200900/ 11/04/00389 valid from 04/08/04 to 03/08/05 the insured amount being Rs.10 Lacs only.

3)        Under the above said policy the property situated at Khetani Industrial Estate, Bail Bazar, Sonapur Lane, Kurla (W), Mumbai, was insured against fire and special perils.  On 26/07/05, there was a heavy rainfall resulting in heavy flood.  The damage due to flood is the risk covered under above said policy. The claim of the Complainant was for fall of tree on the roof of the insured building due to flood water on 26/07/05.  The roof of the insured building was damaged.  The principle of proximate cause is applicable to this claim.  But the Opposite Party denied this principle.

4)        Surveyor was appointed to assess the loss but he did not apply the principle of proximate cause and hence, did not consider the loss. The loss to the roof was of Rs.1,43,000/- but the Opposite Party repudiated the claim vide its letter dtd.28/11/08.

5)        The Complainant specifically averred that the loss was caused due to flood and hence, covered under the policy.  Therefore, Opposite Party is liable to indemnify the loss.

6)        As the Opposite Party did not sanction above claim, the Complainant suffered mental torture.  The reason for repudiation was not legal.

7)        Finally the Complainant prayed for order directing the Opposite Party to pay Rs.2,93,000/- with interest @ 11%  till pay payment.

8)        The Complainant has attached the xerox copies of the following documents alongwith his complaint –

            a) Repudiation letter dtd.24/11/2008.

            b) Letter from the Complainant to Opposite Party dtd.28/11/08.

            c) Details of loss suffered by the Complainant.

            d) Opinion of  Rtd. Justice Shri. A.A. Halbe.

            e) Internal letter of Opposite Party dtd.17/03/08.

9)        The above said complaint was admitted and show-cause notice was duly served on the Opposite Party.  Opposite Party appeared before this Forum and filed its written statement wherein it denied the allegation of deficiency and admitted that the Complainant had lodged his claim for loss/damage caused to building, plant & machinery, furniture  & fixtures, fittings and stock, due to heavy rain on 26/07/2005.  Upon receipt of the above said claim, the Opposite Party appointed surveyor who surveyed the loss to the tune of Rs.3,83,293/- (The Opposite Party filed the survey report at Exh.‘D’ to its written statement).  The Complainant accepted the said amount of Rs.3,83,393/- as full & final settlement.

10)      The Opposite Party has further clarified that the surveyor did not consider the Complainant’s claim of damage to the roof as it was not due to inundation but the damage was due to falling of tree on the roof.  Therefore, falling of a tree on the roof is not a peril covered under the policy hence, the claim of the Complainant in respect of damages to the roof caused by fall of tree, was rejected.  The surveyor clarified the position vide his letter dtd.09/12/05 as follows –

            “On the said day i.e. on 26/07/2005, there was torrential rain in Mumbai and it was not accompanied by any cyclone. The wind speed had not exceeded 37 kms. which would mean there is no claim under cyclone cover. The falling of tree was caused due to the fact that it had rotted and the inundation of water had only expedited the same.”  

            “The loss caused due to roof collapse has been caused by falling of tree and not by inundation of water directly. You will also agree that the fire policy envisages cover for building objects, which is restricted to the wording contained in the policy and the falling of tree is not amongst the wording contained in the policy.  On analysis of unbroken chain of events the loss had been caused due to falling of tree which in turn was caused due to instability and not by inundation. This aspect has been explained to the insured repeatedly and he did concur on this aspect during our discussion. We surprised that he has raised this point with your grievance cell.  Further more we wish to state in the same area there are other trees which have not been uprooted which only adds to our contention that this particular tree had fallen because it had become unstable as a result of its roots weakened.  You will no doubt & appreciate that this cannot be considered as a insured peril under Standard Fire Policy.  Under the circumstances, an addendum on this aspect would not be necessary in our opinion.”  

11)      The Opposite Party has clarified that on the basis of the above surveyor’s report, it rejected the Complainant’s claim.

12)      The Opposite Party has further stated that the Complainant invoked arbitrary clause vide its letter dtd.28/06/06.  The Opposite Party appointed M/s. Sunil J. Vora & Associates its own arbitrator. The Complainant appointed his arbitrator Shri. S.R. Shah. The Complainant objected to the appointment of M/s. Sunil J. Vora & Associates.  The Opposite Party has further stated that when each party appoints its own arbitrator, the third arbitrator to be appointed by such two arbitrators.  When the arbitration proceedings were initiated, the Complainant referred the matter to the Grievance Cell of the Opposite Party. Then again the Complainant invoked the arbitration clause.  The Opposite Party has then stated that the Complainant is not entitled to Rs.1,43,000/- and other reliefs claimed by him in the complaint.  Finally the Opposite Party has requested to dismiss the Complaint with cost.

13)      Both the parties filed their respective affidavits of evidence and written arguments.  The Complainant has reiterated the facts mentioned in his complaint and the Opposite Party has reiterated the facts mentioned in its written statement.  The Opposite Party has attached the xerox copies of the following documents alongwith its written statement -

            a)  Insure Insurance Policy.

            b)  Letter dtd.28/07/2005.

            c)  Survey report.

            d)  Letter dtd.09/12/2005.

            e)  Letter dtd.04/05/2006.

            f)  Letter dtd.31/05/2006.

            g)  Letter dtd.05/06/2006.

j)   Letter dtd.28/06/2006.

i)   Letter dtd.10/07/2006.

j)   Letter dtd.12/07/2006.

k)  Letter dtd.17/07/2006.

l)   Letter dtd.24/07/2006.

m) Letter dtd.31/08/2006.

n)  Letter dtd.08/09/2006.

o)  Letter dtd.12/10/2006.

p)  Letter dtd.26/04/2007.

q)  Letter dtd.14/05/2007.

r)   Letter dtd.13/07/2007.

s)   Letter dtd.23/07/2007.

f)   Letter dtd.24/11/2008.

14)      We perused all the documents submitted by both the parties and heard the Ld.Advocates Shri. Y.S. Singh and J.D. Karanjkar.  Our findings are as follows –

15)      The Complainant has obtained a Fire and Special Peril Policy vide No. – 0200900/11/04/0389.  During the validity of this policy on 26/07/2005 there was a torrential rain in Mumbai city and adjoining area. Property of the Complainant situated at Khetani Industrial Estate, Bailbazar, Kurla (W), Mumbai, which was insured under the above said policy against perils like, Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation under Clause VI, sustained loss caused by flood.

16)      During torrential rain on 26/07/2005 and thereafter, there was a heavy flooding, the property of the Complainant situated at Bailbazar, Sonapur lane, Kurla (W) was damaged.  The information of the loss was given to the Opposite Party.  Opposite Party appointed surveyor who assessed the loss to the tune of Rs.3,83,293/- but did not consider the damage to the roof of a insured building on the ground that the damaged was caused due to fall of tree and not due to flooding in the area.  Even he has not assessed the loss caused to the roof of the building.  However, the Complainant has given his assessment as Rs.1,43,000/-.

17)      In this case only the point of dispute is whether the loss caused during the flood, due to fall of tree is covered under the insurance policy.  As it is stated by the surveyor of the Opposite Party only that there was a torrential rain on 26/07/2005 and thereafter due to this heavy rain there was a stagnation of water in the area where the insured building is situated.  Therefore, it is but natural that there was a loosening of soil which supported the tree and because of these condition the tree must have fallen.  The fall of a tree on the building is a natural calamity which is the part of the flooding due to heavy rains on 26/07/07.  Therefore, in our view, the fall of a tree is not only a proximate cause of loss but it is the part of the natural calamity due to flooding in a torrential rain and therefore, the loss caused to the roof due to fall of a tree due to heavy rain is certainly covered under Clause VI of the policy.  However, while rejecting the claim the Opposite Party has stated that the claim is not a loss covered under Clause VI of the policy.  Thus, the rejection of the claim by the Opposite Party is not proper and it is because of non application of mind.

18)      It is also a pertinent fact that the surveyor appointed by the Opposite Party has not assessed the loss caused to the roof of the insured building.  The Complainant has asserted in his complaint that “the policy on reinstatement basis loss to roof is Rs.1,43,000/- was lodged.  However, there is nothing on record that the loss was actually quantified to Rs.1,43,000/- by any independent authority. The Complainant himself has written one letter dtd.08/09/2006, addressed to Justice Mrs. K.K. Baam, (Rtd.) (in connection with arbitration) wherein it is stated by the Complainant that “we suggested 3 names of retired Justice/Judges, one of them to be appointed sole arbitrator, since amount disputed is only approx. Rs.75,000/- (net) we are of the opinion that sole arbitrator can solve the issue.”

            In further para the Complainant has asserted as follows –

            “For a sum of approx. Rs.75,000/- (Net) involved in a disputed we feel appointment of sole arbitrator from law faculty is a viable proposal to resolve the dispute.”

19)      From these averments of the Complainant himself it appears that the Complainant has also accepted that the dispute is of Rs.75,000/- towards the loss to the roof of the insured building.  There is no any independent report regarding the loss caused to the roof. The Opposite Party has mentioned that the dispute is of Rs.75,000/- which was not resolved.  It is true that there is arbitration clause in the policy obtained by the Complainant it appears from the record that both the parties have suggested that the dispute regarding loss sustained by the Complainant to the roof of the building should be solved through arbitrator.  However, because of counter suggestion of the names of arbitrators of their choice the same could not be solved.  It appears that later on the Opposite Party repudiated the claim of Rs.75,000/- also which was later on claimed against the claim of Rs.1,43,000/- on the ground that the same is not covered under the clause of the policy issued in favour of the Complainant.  In our candid view the contention raised by the Opposite Party for not resolving the dispute of the damage sustained to the roof of the building of the Complainant itself is arbitrary.  The Opposite Party has tried to take summer solt of different methods for not solving the claim of damages sustained by the Complainant due to fall of tree on the roof of the Complainant’s building under the garb of not following arbitration clause.  We find from the pleadings and documents that the loss caused to the roof during the torrential rain as claimed by the Complainant to the tune of Rs.75,000/- is just and proper and the Opposite Party is liable to pay the said loss/damage to the Complainant.  The same is covered under the insurance policy as stated above.  According to us, the Arbitration and Conciliation Act which is special Act does not oust the jurisdiction of Civil Court or Consumer Forum to decide the present dispute as the parties do not take appropriate steps or contemplated under the said Act. the We therefore hold that the Opposite Party is liable to pay and reimburse the said amount to the Complainant from the date of loss. Therefore, there is a deficiency in service on the part of the Opposite Party as it repudiated the claim of the Complainant on frivolous ground that the fall of tree is not covered under the policy, though the fall of tree is the part of raining & flooding which was covered under the policy.  We also hold that as the Complainant has proved that there is deficiency in service on the part of Opposite Party, the Opposite Party is liable to pay Rs.10,000/- to the Complainant as compensation for deficiency in service. Therefore, the Opposite Party is liable to pay the compensation for deficiency and the cost of this complaint.  Therefore, in view of the above findings we pass the following order -

                                                                                                     O R D E R

            1.    Complaint No.265/2008 is partly allowed.

2.         The Opposite Party is directed to reimburse Rs.75,000/-(Rs.Seventy Five Thousand Only) to the Complainant towards the loss caused to the roof of the insured building of the Complainant situated at Khetani Industrial Estate, Bailbazar, Kurla (W), Mumbai – 70, with interest @ 9% p.a. from 26/07/2005 till its payment.

3.         The Opposite Party is also directed to pay Rs.10,000/- (Rs.Ten Thousand Only) to the Complainant towards the compensation for deficiency in service.

4.         The Opposite Party is also directed to pay Rs.5,000/-(Rs.Five Thousand Only) to the Complainant towards the cost of this complaint.  

5.    Opposite Part is directed to comply with the above said order within 30 days from the receipt of copy of this order.

6.    Certified copies of this order be furnished to the parties.