Judgment:K.C. Gupta, President:
1. Briefly stated the facts are that complainant is a proprietorship firm having its business premises at KD-20, MIG flats, Pitampura, Delhi and the complaint is being filed through Sh. Parveen Sharma who has been duly authorized to file the complaint Annexure C-1.
2. It was next averred that M/s. JB Overseas was established in the year 1998 to do the business as importers, exporters and distributors of pulses, wax, chemicals and other petro products, etc.
3. It was further averred that during the month of January,2005, complainant purchased 15779.33 metric tones of yellow peas of the value of Rs. 18,77,78,822.70 from M/s. Kundan Rice Mills Ltd. and the said amount remained due from the complainant to M/s. Kundan Rice Mills Ltd. on 31.3.2005 as per balance sheet Annexure C-2. Later on account for the period 1.1.2005 to 6.6.2005 was squared of on 6.6.2005 vide Annexure C-3.
4. It was next averred that complainant purchased a Standard Fire and Special Perils Policy with earthquake peril extension Annexure C-4 from the United India Insurance Co. Ltd. The policy covered the stocks of all kinds of pulses/or other allied goods connected with the insureds trade on floater basis for the period 30.10.2004 to 29.10.2005 for a sum of Rs.8 crores. After the said sum insured exhausted, considering all the circumstances the complainant purchased short term policy for a sum of Rs.19 crores on 3.1.2005 which was valid up to 2.3.2005. Copy of the policy is Annexure C-5. It purchased another short term policy on 3.3.2005 covering risk to the tune of Rs. 5 lacs on 3.3.2005 which was valid up to 2.6.2005.
5. It was further averred that on 6.6.2005 at the request of complainant the United India Insurance Co. Ltd. ( hereinafter to be referred as Insurance Company) increased the sum insured from Rs. 8 crores to Rs. 17.88 crores vide endorsement No. 200700/11/05/30035 which is Annexure C-7. Accordingly Insurance Company was paid premium of Rs. 2,61,835 and Rs. 1,29,346 as asked by it on 30.10.2004 and 6.6.2005 respectively.
6. It was further averred that initially the policy No. 200700/11/01/00577 covered the stocks whilst lying/stored at different godowns/or ports situated in Mumbai and by way of extra endorsement No. 200700/11/01/30110 Annexure C-8 dated 29.12.2004 stocks, stored or lying at the ports/towns including Kolkata port/town were also covered as mentioned in para-10 of the complaint. The standard fire and special perils policy covered 12 perils as mentioned in para-12 of the complaint.
7. It was further averred that due to thunderstorm and followed by heavy rainfall on 19.6.2005 and 28.6.2005, the stocks of complainant firm which were lying at godown in Kolkota were damaged and the matter was immediately informed to the Insurance Company telephonically and later on a formal written information was also sent on 30.6.2005.
8. It was next averred that after repeated requests Insurance Company deputed M/s. S.N. and Associates for survey on 1.7.2005 and was further conveyed to the Insurance Company vide letter dated 6.7.2005, whose copy is Annexure C-9. Consequently M/s. S.N. and Associates conducted survey on various dates. On the asking of Surveyor, Insurance Company contacted M/s. Uni-Lab (India) which inspected the spot and gave the certificate Annexure C-11 showing that loss took place due to heavy rains and rainy water entered into transit shed through broken pipes and dongas (rain channel) and damaged the yellow peas stored in the godown at KPD Kolkota and a stock of 413.715 MT of yellow peas was damaged causing financial loss to the tune of Rs. 49,43,894. However, after persistent efforts an amount of Rs. 2,52,313 could be recovered from salvage which brought the net loss to Rs. 46,91,581.
9. It was next averred that on the basis of inspection by the first surveyor, the Insurance Company did not settle the claim and deputed another Surveyor on 31.10.2005 and complainant extended full cooperation to the survey agencies appointed by the Insurance Company but the claim was not decided for a long time and ultimately vide letter dated 14.7.2006 Annexure C-16 opposite party repudiated the claim.
10. Alleging deficiency in service, the complaint was filed on 30.10.2006 to indemnify the complainant for the loss of Rs. 46,91,581 along with intrest @ 18% p.a. Besides it, the complainant claimed Rs. one lac for harassment, Rs. 10 lacs for loss due to disturbances in normal business , Rs. one lac as punitive damage and Rs. 55,000 as costs.
11. United India Insurance Company Ltd. has been sued through different persons but for the purpose of reference it is to be referred as âInsurance Company in a singular form. The Insurance Company took preliminary objections that the complainant has no locus standi to file the present complaint ; that the complaint was not maintainable as there was no negligence or deficiency in service on its part ; that the complainant violated terms and conditions of the policy as occurrence took place on 19.6.2005 but was reported by the complainant on 30.6.2005 at the time of reporting of second claim and no reason whatsoever has been given as to why alleged loss was not reported as per terms and conditions of the policy. It next stated that the loss as per survey report was due to seepage which was not covered under the policy as the policy covered losses on account of storm, cyclones typhoon, tempest, hurricane tornado, flood and inundation. On merits, it denied allegations of the complainant and stated that there was no deficiency on its part. It also stated that the Surveyor submitted report after investigation of the matter thoroughly and the loss took place due to heavy rain and rainy water entered into transit shed through broken pipes and dongas resulting damage of cargo of yellow peas stored therein. It further stated that condition of the shed was not good and the agents did not store yellow peas in the good conditioned godowns and no preventive measures were taken to protect the goods from heavy rains. It next stated that complainant had suffered first loss on 19.6.2005 and another loss on 28.6.2005 but no measures of precaution were taken to prevent loss after the first loss. It next stated that the agents M/s. Ravi Shipping Agency and Soham Shipping Agency stored the goods i.e. yellow peas in deteriorated godowns and for their acts, Insurance Company was not liable. It denied other allegations and stated that the claim of complainant did not fall under the head VI, so, it stated that the claim had been rightly repudiated.
12. Parties adduced their evidence by way of affidavits.
13. We have heard Counsel for complainant Mr. Mukand Gupta, Counsel for opposite party Mr. .Sushil Grover and carefully gone through the file.
14. It is an admitted fact that during the month of January, 2005 complainant had purchased 15779.33 MT of yellow peas as under:
| Date | B/L | Quantity | Amount |
| 1.1.2005 | VCR/India-2 | Â 2629.733 MT | 3,12,93,822.70 |
| 16.1.2005 | VCR/India-2 | 13150.000 MT | 15,64,85,000.00 |
| Â | Â | 15779.733 MT | 18,77,78,822.70 |
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15. This purchase is also reflected in the account of M/s. Kundan Rice Mills, suppliers for the period 1.4.2004 to 16.1.2005 Annexure C.2. The copy of the account Annexure C-3 for the period 1.1.2005 to 6.6.2005 shows that the account of M/s. Kundan Rice Mills was squared of by M/s. J.B.Overseas i.e. complainant on 6.6.2005. Thus, complainant had purchased the stocks of yellow peas from M/s. Kundan Rice Mills Ltd., a sister concern, which was damaged. Initially complainant firm had purchased Standard Fire and Special Perils Policy with earthquake peril extension Annexure C-4 from the Insurance Company which covered the stocks of âall kinds of pulses/or other allied goods connected with the insureds tradeâ on floater basis for the period 30.10.2004 to 29.10.2005. At the inception, the policy was taken for 8 crores but when the sum insured was exhausted, then complainant purchased short term policy for a sum of Rs. 19 crores on 3.1.2005 which was valid up to 2.3.2005. The copy of the same is annexure C-5. Thereafter on 3.3.2005, another short term policy was purchased for covering the risk to the tune of Rs.5 lacs after making payment of premium, whose copy is Annexure C-6. Again on 6.6.2005, complainant asked the Insurance Company to increase the sum insured from Rs. 8 crores to Rs. 18.77 crores which was allowed by the Insurance Company vide extra endorsement , whose copy is Annexure C-7. Premium amounts were duly paid as demanded by the Insurance Company. Initially the Policy Annexure C-4 covered the stocks whilst lying/stored in different godowns/ports situated in Mumbai. However, by way of extra endorsement, whose copy is Annexure C-8 dated 29.12.2004 , stocks stored/lying at the ports/town among others at the Kolkata port/town was also covered. This endorsement was effective from 29.12.2004 to 29.10.2005.
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16. The Standard Fire and Special Perils Policy covered the following 12 perils which are mentioned at page 29 of the file as under:
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(i) Fire
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(ii) Lightning
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(iii) Explosion/Imposition
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(iv) Aircraft damage
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(v) Riot, strike and Malicious damage
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(vi) Storm, cyclone, typhoon, tempest, hurricane, tornado, flood and inundation
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(vii) Impact damage
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(viii) Subsidence and landslide including rock slide
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(ix) Bursting and /or overflowing of water tanks, apparatus and pipes
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(x) Missile testing operations
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(xi) Leakage from automatic sprinkler installations
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(xii) Bush fire
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17. The case of the complainant is that due to thunder storm accompanied by heavy rain fall on 19.6.2005 and 28.6.2005, its stocks which were stored in the gowon known as 4 KPD, Kolkata port were damaged and the matter was informed immediately to the respondent company telephonically and later on formal written information was also sent on 30.6.2005. After repeated requests, M/s. S.N. and Associates were deputed by the Insurance Company for survey on 1.7.2005 and they visited the spot on 2.7.2005 and the estimate of loss was conveyed to them. The complainant further conveyed the loss to the Insurance Company vide letter dated 6.7.2005, whose copy is Annexure C-9. In it, the loss had been estimated to be Rs.55 lacs approximately. The report whose copy is Annexure C-11 issued on behalf of M/s. Uni-Lab (India) surveyors and superintendents dated 4.2.2006 shows that they had informed Assistant Superintendent, Kolkata port trust that M/s. J.B.Overseas had appointed them for supervision and delivery of the yellow peas stored at 4, K.P.D. on behalf of M/s. Kundan Rice Mills Ltd. and further certified that due to heavy rains on 19.6.2005 rainwater entered into the transit shed at 4, K.P.D. through two broken pipes and donga, resulting in rainwater damaging a portion of the cargo of yellow peas stored therein. There is another letter dated 4.2.2006 from Sohom Shipping Services Pvt. Ltd. , authorised labour contractor of M/s. J.B.Overseas i.e. complainant for loading, stacking of their cargo at 4 KPD in Kolkata port trust stated that on 19.6.2005 due to heavy rain, two pipes and donga of the roof in 4, KPD were broken and about 400 MT yellow peas were damaged. To the same effect is report dated 11.2.2006 Annexure C-13 of Ravi Shipping Agency Pvt. Ltd. , custom authorized agents. The status report of S.N. and Associates dated 5.10.2005 is attached at page 35 of the file. In it, it has been mentioned that the damage had taken place due to rain water on 19.6.2005 and 28.6.2005 at Kolkota Port Trust godown. It is further mentioned that the complainant had received consignment of Canadian yellow peas on 19.12.2004 in the name of M/s. Kundan Rice Mill Limited at 4 KPD, so, total quantity of consignment was 15779.733 MT out of which 11776 MT were unloaded at 9 NSD and 4003.733 MT at 4 KPD. It is further stated that 4 KPD godown where the material was stored was very old and due to rains, water leaked into the godown through several holes and caused damage on 19.6.2005 as well as on 28.6.2005 and actually the first monsoon had arrived in the West Bengal. However, they had not assessed the loss as according to them, material was damaged due to rain water which leaked into the godown through several holes in the roof and broken joints of the pipes and dongas as well as on account negligence on the part of insureds representative. They had further mentioned in para-11.5 that there was no evidence of flood/inundation for the period of 19.6.2005 to 28.6.2005 in the local newspaper and the monsoon was late in that year and the spells showered on these dates were only like drizzle. Thus, statement of S.N.and Associates is wholly wrong because weather report for dates 19.6.2005 and 20.6.2005 reads as under:
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| Station: Kolkata (Alipore) | Period 19.6.2005 |
| Date | Station | Weather | Time of commencement(IST) | Time of cessation(IST) |
| 19.6.05 | Kolkata | Lightning | 2218 | 2220 |
| Â | (Alipore | Thunderstorm | 2220 | 2230 |
| Â | Â | with rain | 2230 | 2400 |
| Â | Â | Â | Â | Contd. Upto 0650 of Next day |
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Rainfall: Rainfall for past 24 hours ending at 0830 hrs on 20.6.2005 =069.9mms
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Wind direction and speed (kmph) at 03 hourly interval.
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| Date | 0230hr | 0530hr | 830hr | 1130hr | 1430hr | 1730hr | 2030hr | 2330hr |
| 19.6.05 | S/04 | S/04 | S/06 | S/04 | SE/06 | SSE/10 | SSW/08 | N/12 |
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Legend: S=South SE=South, East, SSE=South South East, N= North, SSW=South South West
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18. Therefore, according to this weather report during 24 hours there was rainfall of 069.9 mms and there was lightning thunderstorm and thunderstorm with rain. Therefore, it cannot be said that there was only drizzle but there was heavy rain accompanied by thunderstorm.
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19. The final survey report of S.K. Majumder which is at page 43 of the file and is dated 7.12.2005 shows that as per version of insured, there was heavy rains in Kolkata on 19.6.2005 and the godown situated at 4 KP Dock, Kolkata was very old and rain water entered through the pipes, sheds, Dongas and skylights, etc. which were broken due to heavy rain and in the bargain the material stored therein got damaged. Again on 28.6.2005 there was heavy rain in Kolkata and rainwater started entering the godown in similar fashion, however, insured in order to prevent its stored material covered the same with tarpaulin and accordingly informed the insurer on 30.6.2005 about loss of both the incidents. During the course of survey, he had thoroughly inspected the damaged godown and observed that at several places new repairing marks on rain water pipes, dongas, skylights, sheds etc. in the godown were visible and signified that those were in broken/damage condition prior to occupation of godown by the new tenant and he had repaired the same. The insured had preferred a claim of Rs. 46,91,581.00 as per claim bill Annexure-6 which is as under:
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| Particulars | Rate per | Qty in | Â Amount (Rs) |
| Â | MT | MT | Â |
| Damated cargo of yellow peas | Rs. 11,950 | 413.715 | 49,43,894.00 |
| Less: Salvage value for damaged cargo | Â | Â | 2,52,313.00 |
| Â | Â | Total | 46,91,581.00 |
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20. The Surveyor assessed the value of damaged yellow peas on 19.6.2005 as 401.140 MT XRs.11353.81=45,54,282.81. He had further assessed loss of damaged yellow peas to the tune of Rs.2.900 MT on 28.6.2005 and the value to be Rs.32,949.24. He had calculated the salvage value of the damaged quantity to be Rs.2,50,50.30 with respect to the damage suffered on 19.6.2005. He had further assessed the value of salvage at Rs.1810.98p of the damaged yellow peas suffered on 28.6.2005 and thus, assessed the total loss at Rs. 43,34,918.77p. As far as cause of loss is concerned, he did not investigate independently but accepted the preliminary Surveyors report. The Insurance Company repudiated the claim vide letter dated 14.7.2006 on the plea that after loss caused on 19.6.2005 it was not reported immediately but was reported on 30.6.2005 when second loss occurred on 28.6.2005. This plea of Insurance Company is not tenable because loss is to be reported within 15 days as per condition No.6(1) of the Standard Fire and Special Perils Policy which complainant reported and as such there was no deficiency on the part of complainant on this behalf. The complainant after first loss had taken steps and for this reason, there was meagre loss on the second occasion and third most important point of rejection is that damage to the stock took place due to water seepage from the roof through holes in the roof and the broken joints of walls and sheds and dongas and there was no flood or inundation. Therefore, the loss was not covered under the policy as water seepage was not peril under the policy. Another point was also taken that the complainant had disposed of salvage without prior permission of Surveyor and thereby violated terms and conditions of the policy. This also does not appear to be correct because if the damaged yellow peas had not been disposed of then it would have become unsaleable. The complainant had sold the damaged goods to recover some loss and the Surveyor had already deducted the salvage value from the claim assessed.
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21. Now sole question to be determined is whether there was any storm and which was accompanied by heavy rain which broke pipes and dongas (water channel of roof of godown) and then water entered into godown from the roof. It has been clearly mentioned in the weather report Annexure C-10 that there was heavy rains at Kolkata (Alipore) on 19.6.2005. There was lightning, thunderstorm, thunderstorm accompanied with rains. So, certainly there was thunderstorm accompanied with rains and storm is covered under the peril of policy. Otherwise also the complainant has mentioned in the complaint that due to breakage of pipes and dongas the rain water entered in the godown and damaged the stocks and due to heavy rainfall, the drainage system of the port failed which resulted in water logging and a situation of inundation in the godown and consequently, lower layers of yellow peas stocks were also damaged severely. The complaint is verified by affidavit of Sh. Parveen Sharma, authorized signatory of M/s. J.B.Overseas. Since, there was rain continuously for 24 hours ending at 8.30 hrs on 20.6.2005 starting from 24.00 hrs and there was rain of 069.9 mms, so, certainly it must have inundated the streets of Kolkata round about the godown where stock was stored and due to heavy rainfall drainage system must have failed which would have created a flood like situation. Thus, the contention of learned Counsel for opposite parties that the damage is not covered under the peril of policy has got no force and Insurance Company was certainly deficient in rejecting the genuine claim of complainant.
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22. Therefore, in view of the discussion above, the complaint is accepted with costs of Rs. 10,000 and complainant is awarded Rs. 43,34,918.77p as calculated by the Surveyor Sh. S.K. Majumder, along with interest @ 9% p.a. after a period of two months from the date of report of S.K. Majumder dated 7.12.2005 till payment. However, complainant is not entitled to compensation for disturbance in normal business/cash flow as it is indirect loss and compensation for harassment, etc. is included in the interest component.
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23. Copies of this order be communicated to the parties, free of charge.