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M/s. Indian Agro Foods through its Partner Anand Angira Chhabra v/s National Insurance Company Ltd. & Another

    Complaint Case No. 105 of 2020

    Decided On, 20 May 2021

    At, Union Territory Consumer Disputes Redressal Commission UT Chandigarh

    By, THE HONOURABLE MR. JUSTICE RAJ SHEKHAR ATTRI
    By, PRESIDENT
    By, THE HONOURABLE MRS. PADMA PANDEY
    By, MEMBER & THE HONOURABLE MR. RAJESH K. ARYA
    By, MEMBER

    For the Complainant: Pradeep Sharma, Advocate. For the Opposite Parties: None.



Judgment Text

Padma Pandey, Member

1. The facts, in brief, are that the complainant firm is engaged in the business of poultry farming. In the year 2018, the complainant firm took policy i.e. Standard Fire and Special Perils Policy bearing No.420101111810000147 valid from 27.05.2018 to 26.05.2019 from Opposite Party No.1 having sum insured of Rs.8,70,00,000/- at the premium of Rs.58,516/-, in which, description of property covered as “poultry farms (excluding birds therein), hatchery, section IV-industrial manufacturing risk”. It was further stated that the complainant paid additional premium of Rs.1028/- and got an add on coverage of “Earthquake”. During the policy period, on 09.02.2019, the insured building, in question, was damaged due to earthquake and accumulation of water due to heavy rainfall. The said fact was reported to the insurance company on the same day i.e. 09.02.2019, who appointed M/s Consolidated India Surveyors as a surveyor for assessment of the loss. It was further stated that no other terms and conditions were supplied to the complainant. The insurance claim of the complainant was repudiated by the Opposite Parties by citing reason that the case falls under the Exclusions of Peril-Subsidence and Landslide. The complainant procured the copy of terms and conditions from the office of the insurance company and found that the Opposite Parties have some other terms and conditions which are different from those mentioned online. It was further stated that “Flood and Inundations” and “Earthquake”, was certified by the Tehsildar of the area vide certificate dated 21.02.2019. It was further stated that in order to make the case non payable on the ground of exclusions and peril “subsidence and landslide”, the Opposite Parties through their surveyor sought report from M/s Continental Foundations & Labs. The said Engineering firm in its report stating that they were contacted by Mr.Joshi on behalf of the insurance company intimating the loss and mentioned therein that the said Engineering Firm was asked to visit the site alongwith team members of insurance company to find out the reasons of collapse. Accordingly, site was visited by the relevant members on 12.02.2019. The said Engineer inspected the site on behalf of M/s Continental Foundation. The said Surveyor M/s Consolidated Insurance Surveyor and Loss Assessors Private Limited submitted his report on 25.06.2019, in which, it has been specifically mentioned that there was no storm and landslide and subsidence also could not be noted at the site of loss. It was further mentioned that the said loss might have been caused due to structural failure or poor quality of construction material used for construction of the building. It was further stated that Naib Tehsildar, Barwala has certified that the building premises of the complainant’s feed mill has been collapsed due to earthquake and accumulated water caused by heavy rains. However, the Opposite Parties ignored and did not agree to the certificate of Government Officer. It was further stated that vide email dated 11.07.2019, the surveyor asked the complainant to provide report from Meterological Department (Annexure C-13) but he failed to do so. The complainant also got survey done from an independent licensed surveyor Mr.Vinod Bhan and Associates to cross check. The quantum of loss was shown by the complainant in para No.23 of the complaint i.e. Rs.54,75,000/-. Ultimately, the Opposite Parties repudiated the genuine claim of the complainant vide letter dated 04.12.2019 (Annexure C-16), in which, surveyor came to the conclusion that the loss has been caused due to faulty design, faulty constructions, poor workmanship and the building was overloaded. Despite repeated requests made by the complainant for settlement of the claim, they failed to do so. It was further stated that the aforesaid acts, on the part of the Opposite Parties, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under the Consumer Protection Act (in short the ‘Act’ only), was filed.

2. The Opposite Parties, in their written version, has denied that the building collapsed due to heavy rains, earthquake and subsidence. It was stated that the complainant failed to place on record any report from Metrological Department to prove heavy rains and earthquake in the area on the date of loss i.e. 09.02.2019. It was further stated that as per report of structural Engineer i.e. M/s Continental Foundations and Labs, the insured building collapsed due to structural failure and use of poor quality materials in the construction and the insurance company not covered any loss due to defective design or workmanship or use of defective materials under Clause viii(d) of the terms and conditions of Standard Fire and Special Perils Policy. Therefore, the replying Opposite Parties through registered letter dated 19.12.2019 rightly repudiated the claim of the complainant on the ground that the said loss was due to defective design or workmanship or use of defective materials. It was further stated that the complainant has not reinstated or repaired the damaged building and plant & machinery and not submitted any repair bills, as such, the said surveyor rightly assessed the loss on depreciated value basis. It was further stated that the complete insurance policy with its terms and conditions were duly supplied to the complainant at the time of commencement of policy and prior to filing of the complaint, the complainant never raised any objection with regard to non supply of the terms and conditions of the policy. It was further stated that the complainant has failed to provide any report from Indian Metrological Department regarding the earthquake and heavy rainfall on 09.02.2019. It was further stated that the Tehsildar is not competent authority to issue certificate regarding earthquake and heavy rains. The surveyor requested the complainant to provide the report of Metrological Department certifying the incident of earthquake and heavy rains but it failed to provide the same. It was further stated that the complainant obtained the report from Sh.Vinod Bhan Associate and Surveyor at their own whims and fancies, vide which, it is apparent that the same was prepared merely by sitting in the office as per wish of the complainant. It was further stated that the said loss was caused due to structural failure of the building and use of poor quality materials in the constructions. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into unfair trade practice.

3. The Parties led evidence, in support of their case.

4. We have heard the Counsel for the complainant and have gone through the evidence and written arguments of both the parties, carefully.

5. The sole question that falls for consideration, is, as to whether, the claim of the complainant was rightly repudiated by the insurance company. The answer, to this, question is in the affirmative. It is the admitted fact that the complainant firm took insurance policy i.e. Standard Fire and Special Perils Policy from Opposite Party No.1, which was valid from 27.05.2018 to midnight 26.05.2019 and according to the complainant, it paid additional premium of Rs.1028/- and got an add on coverage of “Earthquake”. As per the complainant, the said insured building was damaged during the policy period i.e. on 09.02.2019 due to earthquake and accumulation of water due to heavy rainfall. It is also the admitted fact that the said matter was reported to the insurance company on the same day i.e.09.02.2019, to which, M/s Consolidated India Surveyors was appointed as surveyor for assessment of loss. The claim of the complainant was repudiated by the Opposite Parties vide letter dated 04.12.2019, the relevant portion of the said report reads thus :-

“X x x x x The surveyor has submitted his report dated 25-06-2019 after taking into account the report of the structural engineer besides the physical inspection done by the surveyor it was concluded that no land slide/subsidence could be noted on his visit on 10-02-2019 and 11-02-2019. The Standard Fire & Special Perils Policy does not cover damages caused due to defective design or workmanship or use of defective material and the subject loss is not admissible as per exclusion (d) of the peril ‘Subsidence and Landslide including Rock Slide.’

The surveyor recommended for repudiation of the claim as the same does not fall within the scope of the policy and the competent authority has scrutinized the entire records and came into the conclusion that the claim is not payable. In view of the facts mentioned above your claim stands repudiated, which please note.”

In view of afore-extracted paragraph, it is clear that the claim was repudiated on the ground of defective design or workmanship or use of defective materials . In the present case, the plea taken by the complainant that the said insured building collapsed due to heavy rains and earthquake has no value at all because the complainant has failed to place on record any report from Metrological Department to prove that heavy rain and earthquake in the area on the date of loss i.e. on 09.02.2019. To prove this fact, the complainant placed on record certificate of Tehsildar but the said certificate is not tenable in the eyes of law because the said Tehsildar is not competent to issue any certificate regarding the weather conditions because the Government already established Metrological Department to submit the report. Moreover, perusal of the zimini order dated 17.08.2020 shows that this Commission also directed Indian Metrological Department to submit a report as to whether there was any earthquake in the area of Barwala, District Panchkula (Haryana) between 05.02.2019 to 09.02.2019. If there was any earthquake during the said period, its frequency at Richter Scale be also intimated further verify as to whether a building can collapse at such a frequency on the date of earthquake or thereafter. In compliance to the said order, a letter dated 07.09.2020 has been received from Metrological Department that the required seismic data cannot be submitted to this Commission because seismic records are not maintained and provided by the o/o Director, National Center for Seismology c/o Mausam Bhavan Complex, India Meteorological Department, Lodi Road, New Delhi. Therefore, notice was issued to the said department and direction was issued to submit the report

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. On the next date of hearing, perusal of zimini order dated 02.12.2020 shows that a report has been received from the said authority, wherein, it has been stated that “no significant earthquake have occurred between 05.02.2019 to 09.02.2019 in the area of Barwala of District Panchkula (Haryana). Importantly, as per report of structural Engineer i.e. M/s Continental Foundations and Labs, the insured building collapsed due to structural failure and use of poor quality materials in the construction and mortar used in the building at places was weak and 18 rooms constructed on the first floor where the labourers were living have also contributed to structural failure. So, it is clearly proved that there was no earthquake on the date of loss, as such, the claim of the complainant was rightly repudiated by the Opposite Parties on the ground of defective design or workmanship or use of defective materials. Therefore, the complainant has failed to prove its case, as such, the complaint stands dismissed, with no order as to costs. 6. Certified Copies of this order be sent to the parties, free of charge. 7. The file be consigned to Record Room, after completion.
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