BEFORE THE DISTRICT FORUM:KURNOOL Present: Sri. T.Sundara Ramaiah , B.Com B.L., President And Sri. M.Krishna Reddy , M.Sc., M.Phil., Male Member Monday the 19th day of July , 2010 C.C.No 12/09 Between: M/s. Lakshminarayana Contractors,5/134,Kamsali Street,Stone House Pet, Nellore,Rep.by its power of attorney holder,M.Maddilety Reddy S/o. Murahari Reddy,H.No.1-47, R/o Mallalapuram Village,Gudur Mandal,Kurnool District-518 466. ..Complainant -Vs- 1. United India Insurance Company Limited,Represented by its 2. Branch Manager, 18/310, Upstairs,Besides Syndicate Bank,Adoni-518 301, Kurnool District. 3. United India Insurance Company Limited,Represented by its Divisional Manager, 11/170, 1st floor, Madam Mansan,Anantapur-515 001. …Opposite PartieS This complaint is coming on this day for orders in the presence of Sri. S. Sivarama Krishna Prasad, Advocate, for complainant, and Sri. I. Anantha Rama Sastry , Advocate for opposite parties and upon perusing the material papers on record, the Forum made the following. ORDER (As per Sri. T.Sundara Ramaiah, President) C.C. No.12/09 1. This complaint is filed under section 12 of the C. P. Act, 1986 praying to direct the OPs (i) To pay the amount of Rs. 20,00,000/- arisen out of policy bearing No. 051005/44/05/70015, with interest @ 24% P.A. (ii) To award costs of the compliant (iii) To such other relief or relief’s as the Hon’ble Forum deems fit and proper in the circumstances of the case. 2. The case of the complainant in brief is as follows:- The complainant is a construction company. The complainant company executed power of attorney on 10-07-2008 authorizing Sri. M. Maddileti Reddy to file the compliant on behalf of the company. The complainant entered into an agreement with the Superintendent Engineer, Minor Irrigation Works, Kurnool to construct new Minor Irrigation Tank across Pedda Vanka Near Munagala Village Gudur Mandal , Kurnool District . The complainant obtained CONTRACTROS ALL RISKS INSURANCE POLICY on 02-05-2005 from the Ops. The said policy covers the risk at 2 stages . The 1st stage is construction period i.,e from 03-05-2005 to 02-05-2006 and the 2nd stage is maintenance period i.,e from 03-05-2006 to 02-05-2008. The complainant paid the insurance premium covering all risks during construction period as well as maintenance period. The complainant completed the construction work of the tank as per the schedule and the Engineering officials approved the final bill. When the work was under the maintenance period on 22-06-2007 mid night there was heavy rain and due to the said heavy rain water entered into the tank and the tank was breached from Ch.367 to 470 meters at five places. After the damage of the tank the complainant informed the same to the Ops. The Ops appointed a surveyor by name T.Sreenivasan of Anantapur. The officials of the Minor Irrigation Department visited the spot and estimated the damage at Rs.24,77,000/-. The insurance company surveyor did not release the report inspite of notice got issued by the complainant. The surveyor gave a reply to the complainant stating that the final report is ready. The Ops asked the complainant the date of completion of work, and the date of the settling the final bill. The Ops neither repudiated the claim nor settled the claim. The Ops contended that the policy covers risks during the construction period and not for the maintenance period after completion of the construction. The object of paying additional premium is only to cover the risks during the maintenance period also. There was deficiency of service on the part of the Ops in not settling the claim of the complainant. Hence the complaint. 3. OP.No.2 filed written version and the same is adopted by OP.No.1.The complainant filed in C.C.112/08 basing on the Special Power of Attorney dated 22-10-2006. The complainant withdrawn the said complaint and again filed the present complaint along with another Power of Attorney dated 10-07-2008 . The special power of attorney dated 10-07-2008 is created for the purpose of the complaint. The special power of attorney dated 10-07-2008 is not valid under Stamps and Registration Act. The special power of attorney dated 22-07-2007 was not file in C.C.112/08. As per the terms and conditions of the policy the risk of construction covered from 03-05-2005 to 02-05-2006 and maintenance from 03-05-2006 to 02-05-2008. After receiving the intimation of loss T. Sreenivasan surveyor was appointed for conducting the survey. The flood occurred on 22-06-2007 during the maintenance period. As the peril is not occurred during the construction period the ops are not liable to pay any amount to the complainant. M/s. Lakshmi Narayana Contractors entered into agreement with Superintending Engineer, Irrigation Circle, Kurnool for construction of the tank. The S.E Irrigation Circle , Kurnool who is the competent authority to inspect the construction work and issue final completion certificate with irrigation circle, Kurnool is necessary and proper party . The complaint is bad for non -joinder of parties. The policy covers the loss or damage to the contract works during the maintenance period from 03-05-2006 to 02-05-2008. The policy does not cover the major perils like flood. The complaint is liable to be dismissed. 4. On behalf of the complainant PW.1 is examined and Ex.A1 to A12 are marked and sworn affidavit of Maddileti Reddy is filed. On behalf of Ops Ex.B1 and B2 are marked and sworn affidavit of OP.No.2 is filed. 5. Both parties filed written arguments. 6. The points that arise for consideration are (i) whether power of attorney dated 10-07-2008 is true and valid ? (ii) whether the complaint is bad for non joinder of parties ? (iii) whether there is deficiency of service on the part of the OPs ? (iv) whether the complainant is entitled to the relief as prayed for? (v) To what relief? 7. Point 1:- The complaint is filed by M/s. Lakshmi Narayana Contractors represented by its Power of Attorney holder M. Maddileti Reddy. The complainant filed Ex.A1 power of attorney said to have been executed by Lakshmi Narayana Contractors infavour of Sri. M. Maddileti Reddy under the said power of attorney Sri. M. Maddileti Reddy is authorized to file the complaint against the insurance company for recovery of loss occurred to the company. It is the case of the Ops that Ex.A1 is created for the purpose of the present complaint and it was not filed in the previous complaint in C.C.112/08. Admittedly Ex.A1 was not filed in CC. 112/08 filed by the complainant. The said complaint in C.C.112/08 was withdrawn by the complainant with the permission of the forum to file another complaint. In the sworn affidavit of OP.No.2 it is stated that the power of attorney dated 10-07-2008 is created. M/s. Lakshmi Narayana Contractors is not disputing about the execution of Ex.A1 power of attorney infavour of Maddileti Reddy. Ex.A1 power of attorney is duly attested by Advocate notary. Maddileti Reddy in his affidavit evidence clearly stated that he filed fresh complaint basing on the power of attorney dated 10-07-08 under which he was authorized to file a complaint. He also stated that on 10-07-2008 the company executed special power of attorney in his favour to file the complaint against the insurance company. It is argued by the learned counsel appearing for the insurance company that Ex.A1 power of attorney is not registered as per Stamps and Registration Act and that it is not valid. Ex.A1 was executed for a limited purpose of filing the complaint against the insurance company for the recovery of the amount. Under Ex.A1 Maddileti Reddy was not authorized to transfer any immovable property worth more than Rs.100/- . The contention of the learned counsel appearing for the Ops is not sustainable. Further the provisions of the C.P.Act are justice oriented and are irrespective of the procedural technicalities. The complainants company is not disputing about the validity of Ex.A1. Merely because the complainant failed to file Ex.A1 in the 1st complaint in C.C.112/08 it cannot be said that it is created just before filing the present complaint . As already stated Ex.A1 is duly attested by Advocate Notary and it is clearly stated by Maddileti Reddy in his sworn affidavit that it was executed in his favour by the company on 10-07-2008. I am of the firm opinion that Ex.A1 is true and valid document. 8. Point No:- 2 The complainant filed the present complaint against the company claiming an amount of Rs.20,00,000/- stating that he incurred damage of Rs.20,00,000/- due to the breaches caused to the tank constructed by him as per the agreement entered with the Superintendent Engineer Minor Irrigation Circle, Kurnool dated 02-05-05 . Admittedly the complainant agreed to construct the tank as per the agreement Ex.A3 . It is the contention of the Ops that S.E Irrigation Circle, Kurnool is necessary and proper party in this case and that the case is bad for non joinder of necessary party. According to the complainant he completed the construction work of the tank as per the schedule and that the tank was damaged due to the floods occurred on 22-06-2007. The presence of SE Irrigation Circle , Kurnool is not at all required to dispose of the present complaint for the simple reason that it is not the case of the Ops that there was no breach of the tank on 22-06-2007 due to the heavy rains. The complaint cannot be dismissed for mere reason that the SE Irrigation Circle , Kurnool is not added as a party. The SE Irrigation Circle , Kurnool is not a necessary and proper party to the present proceedings. 9.Points 3 & 4: The present complaint is filed by the complainant against the insurance company claiming an amount of Rs.20,00,000/-. Admittedly the complainant is a construction company . It entered into agreement with the Superintendent Engineer Minor Irrigation Works, Kurnool for construction of minor irrigation tank across Pedda Vanka near Munagala Village ,Gudur Mandal , Kurnool District. The 2nd OP executed Ex.B1 policy infavour of the complainant’s company. The said policy is named as in “CONTRACTROS ALL RISKS INSURANCE POLICY” . The said policy covers two stages. The 1st stage is construction period i.e, 03-05-2005 to 02-05-2006 and the 2nd stage is maintenance period i.,e from 03-05-2006 to 02-05-2008. The complainant company took the Ex.B1 policy from OP.No.2 is not under dispute. 10. According to the complainant he constructed the tank as per the schedule , that during the maintenance period on 22-06-2007 mid night there was heavy rain, that flood water entered into tank and as a result the tank was breached at 5 places. The complainant to show that there was heavy rain on the mid night on 22-06-2007 and due to the said heavy rain the MI tank across Pedda Vanka was damaged relied on Ex.A6 letter issued by Tahsildhar , Gudur Mandal , Kurnool District. It is mentioned in Ex.A6 that on 22-06-2007 there was rain fall, that due to the floods the MI tank across Pedda Vanka near Munagala Village is breached. It is further case of the complainant that the damage caused to the tank was informed immediately to the insurance company and that the insurance company appointed a surveyor by name T. Sreenivasan . Admittedly the insurance company appointed Sreenivasan as a surveyor. Ex.B2 is the surveyors report . The surveyor in his report clearly stated that due to heavy flood the newly constructed MI Tank breached at 5 locations. From the evidence available on record it is very clear that there was heavy rain on the night of 22-06-2007 , that due to heavy rain flood water entered into tank constructed by the complainant and that the tank was damaged to some extent. The surveyor appointed by insurance company estimated the loss sustained by insured at Rs.21,25,038/-. The complainant filed Ex.A12 estimate report duly signed by the Executive Engineer , MIW Division , Kurnool . P.W. 1 Executive Engineer who worked from 03-11-2006 to 20-01-2009 in his evidence stated that on the request of the contractor he along with Deputy Engineer visited the work spot and estimated the damage of the construction work at Rs.24,77,000/-. He also stated that Ex.A12 is the estimation report. The complaint is claiming Rs.20,00,000/- . The amount claimed by the complainant is less then the estimate arrived by the surveyor appointed by the insurance company. 11. Admittedly the Ops neither repudiated the claim nor settled the claim . According to the Ops , since the flood occurred on 22-06-2007 . during the maintenance period the Ops are not liable to pay compensation . Admittedly the flood occurred on 22-06-2007 during the maintenance period .Ex.B1 is the insurance policy. The exclusion clause in the policy does not say that the policy does not cover the damage caused to the work due to major perils like floods. It is also mentioned in Ex.A1 that the major perils shall mean claims arising out of flood, inundation etc., In the present case on hand the tank was damaged due to flood on 22-06-2007 i.,e during the period of maintenance . The contention of the Ops that the policy does not cover perils like flood cannot be accepted. There is no specific mention in Ex.B1 that it does not cover the damage caused due to floods. The damage occurred to the tank on 22-06-2007. When Ex.B1 policy was in force. The OPs cannot escape their liability by saying that the damage was occurred to the tank due to poor quality of construction. There is evidence on record to show that the complainant constructed the tank as per the agreement and that the said tank was damaged to some extent due to flood water on 22-06-2007. As the policy was inforce covering the risk during maintenance period the ops are liable to indemnify the loss sustained by the complainant. The failure on the part of the Ops in not settling the claim within reasonable time amounts to deficiency of service. The Ops are liable to pay Rs.20,00,000/- as claimed by the complainant. 12. In the result, the complaint is partly allowed directing the Ops jointly and severally to pay an amount of Rs.20,00,000/- and costs of Rs.500/- with interest at 9% from the date of the complaint i.,e 29-12-2008 till the date of payment . Dictated to the stenographer, transcribed by her, corrected and pronounced by us in the open bench on this the 19th day of July , 2010. Sd/- Sd/- MALE MEMBER PRESIDENT APPENDIX OF EVIDENCE Witnesses Examined For the complainant : For the opposite parties :Nil PW. Deposition of PW1(K.C.Narayana) dt.18-05-2010. List of exhibits marked for the complainant:- Ex.A1 Special power of Attorney Ex.A2. Photo copy of Special power of Attorney dt.22-10-2006 along with Covering letter. Ex.A3. Photo copy of Agreement. Ex.A4. Photo copy of Covering letter for Second supplement Agreement. Ex.A5. Photo copy of Second supplement Agreement No.25/2006-07 dt.03-03-2006. Ex.A6. Photo copy of Rain fall Certificate dt.10-08-2007 Issued Tahsildar, Gudur. Ex.A7. Letter dt.20-11-2007 of Surveyor Sreenivasan to Complainant. Ex.A8. Office copy of letter dt.01-11-2007 of Complainant to the Surveyor.. Ex.A9. Letter dt.03-08-2007 of OP.2 to the Complainant. Ex.A10. Office copy of letter dt.18-02-2008 to OP.2. Ex.A11. Letter dt.23-01-2008 of OP.2 to Complainant. Ex.A12. Estimate Report. List of exhibits marked for the opposite parties: Ex.B1. Contractors all Risk Insurance Policy No.051005/44/05/03/60000015 . Ex.B2. Engineering Survey Report dt.02-01-2008 Sd/- Sd/- MALE MEMBER PRESIDENT // Certified free copy communicated under Rule 4 (10) of the A.P.S.C.D.R.C. Rules, 1987// Copy to:- Complainant and Opposite parties : Copy was made ready on : Copy was dispatched on : | 
