C. Viswanath, Member
Brief facts of the case are as follows:-
M/s. Shivram Chandra Jagarnath is a registered partnership firm, with Mr. Surendra Singh as the Managing Partner. Shivram Chandra Jagarnath Cold Storage has a total capacity of 53989.40 quintals of potatoes. In 2008, Opposite Party No. 1, the New India Assurance Company has issued two assurance policies, Policy No. 420705/44/08/54/30000002 for deterioration of stock of potato policy from 04.04.2008 till 03.11.2008 (in short hereinafter referred to as ‘DOS’) and another Policy No. 420705/44/08/30000001, Machine Break Down policy from 03.04.2008 to 04.04.2009 (in short hereinafter referred to as 'MBD') to the Complainant.
On 13.10.2008, the Complainant requested the OP Insurance Company for inspection of the stock of potatoes insured with them as rot and sprouting was noticed in about 30,000 quintal of potatoes. On 10.11.2008, the Complainant forwarded bills and quotations of Rs.46,921.50/- to the OP Insurance Company for payment under the MBD Policy towards breakdown of compressors. On 30.12.2008, the OP Insurance Company paid an amount of Rs.28,128/- to the Complainant towards the settlement of claim under the Machinery Breakdown Policy for breakdown/repair of machinery installed in the cold storage. The Complainant after assessing the actual loss caused to the stock of potatoes in the cold storage, lodged a claim of Rs.1,35,63,144.65/- for the loss of 24,660.263 quintals of potato under the DOS policy with the OP Insurance Company.
The learned counsel for the Complainant contended that the OP Insurer failed to appreciate that the temperature recorded in the log-sheet was lower than the actual temperature. It is submitted that for most of the year, the cold storage was running properly. However, in the month of September and October, 2008 (more particularly on 19.9.08, 5.10.08, 9.10.08) the 100 HP motors, KC4 Cylinder compressor and exhaust fans stopped working and got defective, leading to increase in temperature inside the cooling chambers, which was not correctly recorded by the staff maintaining the temperature log-sheet. The said staff was immediately removed from the services of the cold storage. The defects of the aforesaid machinery were rectified at the earliest and the same was also duly informed to the OP Insurer. The reimbursement of the cost incurred by the Complainants towards repair of such machinery was claimed and the claim was settled by the OP Insurer under the MBD Policy.
Er. Anil K. Pandey, Surveyor, Loss Assessor was appointed to carry out inspection of stock of potatoes. He submitted his preliminary report on 16.10.08. However, the OP Insurer failed to take into consideration the survey report. The Surveyor has opined that the damage to stock was due to deficiency of the cooling system of CH-II.
The Surveyor, Mr. M.S. Khamesra in his Survey Report has admitted the loss of 24660.263 Qtls. of potato due to sprouting and rotting and assessed the loss of potato to the tune of Rs.98,64,105/-. The Surveyor in his report has also recorded that :-
'a. In my opinion the sprouting could have taken place only due to higher humidity & temperature in the chamber...there seems to be no other cause for sprouting.
b. Against a licensed capacity of 53989.4 qtls 53454.15 Qtls of potato were loaded.
c. Turning of bags was carried out between 21.5 & 28.5, 25.6 & 15.7 in chamber no. 1 & between 29.5 & 22.6, 16.7 & 8.8.2008 in chamber no. 2. – as informed'
Once the cause of loss has been attributed by the Surveyor to higher temperature, merely because the staff has wrongly noted the readings in the log-sheet, does not entitle the Surveyor and OP Insurer to repudiate the claim of the Complainants on frivolous ground.
The OP Insurer failed to appreciate that the pre-assurance survey mentions that the building, plant & machinery were properly maintained and were in good shape. Further, it is a well-known fact that the only reason for sprouting and rotting of potato is the higher temperature, which has been duly noted by the Surveyor in his report and accepted by the OP Insurer. In view of this, the OP Insurer ought not to have repudiated the claim of the Complainant on technical grounds, though the temperature maintained in the log-sheet (erroneously) shows the temperature within the permissible limits.
The Complainant filed the present consumer complaint praying that OP No. 1 to 4 jointly and/or severally may be directed to pay a sum of Rs.1,35,63,144.65/-, pay future and pendentilite interest @18% p.a. and cost.
The learned counsel for the Opposite Parties (OPs) pleads that Government Licensed Surveyors were appointed for verification and assessment of loss. They submitted very detailed reports concluding that the loss is not admissible under the terms and conditions of insurance policy. There is, therefore, no deficiency in service on the part of the OPs. The reasons for the damage are not covered by insurance and hence the claim is not maintainable.
There was negligence on the part of the Complainant in handling urgent repairs. The compressor is stated to have developed problem on 19.09.08 which was repaired and made operational only on 1.10.2008. Mr. Anil K. Pandey Surveyor, conducted a preliminary survey on 14.10.2008 and submitted his report on 16.10.2008. He reported that:
'The damage to potato in Chamber I was found to be very nominal.
Heavy putrifaction/sprouting to stocks in Chamber II was noticed.
The temperature was found maintained in both chambers at the time of survey. At no instance the temperature has increased 40 degree F.
Both the chambers of the cold storage were found overloaded. The total quantity stored was 56607.48 Qtls.
The Surveyor attributed the probable cause of damage to the following reasons:
Deficiency of cooling system of CH-II.
Improper loading. The stacks were noticed closer to the walls which must have restricted air circulation.
There may be overloading. The Bags were found loaded even on the staircase.
The bags not overturned during season. The insured could not provide documentary proof in support of overturning.
The racks also noticed collapsed.
This may certainly increase the loss and is confirmatory to overloading or poor platform.
The preliminary Surveyor has observed that all the probable causes are excluded in the policy.'
The OPs say that they have appointed Mr. M.S. Khamesra on 17.10.2008 for final survey and assessment of reported loss. The Surveyor conducted his survey on 22.10.2008 and on subsequent dates and submitted his assessment report dated 28.4.2009.
The Surveyor stated that the Complainant had submitted log sheets, which show the Cold Chamber Dry bulb temperature has been below 40 degree F from the time loading was completed and upto 14.10.2008 in Chamber no. 2 and up to 19.10.2008 in Chamber no. 1. He further refers to Complainant’s letter dated 14.10.2008 by which it was confirmed that the chamber temperature was always normal, i.e., within 40 degree F during the holding down/storage period. Complainant by a letter dated 13.1.2009, however, denied that the temperature was maintained in both the chambers till the germination in the potato. In a subsequent meeting and statement on 17.2.2009 the Complainant stated that during September & October he checked the log books only and the operators had made wrong entries. The Complainant failed to provide the Surveyor evidence in support of the said statements. In any case the Complainant has himself to blame for the acts of his employee/s. Loss is thus not accidental but owing to lack of control on the part of the Complainant.
Surveyor Mr. M.S. Khamesra has referred to the following facts:
Declared capacity of chamber-I was 25600 Qtls and that of Chamber-2 was 25014.5 Qtls. Thus the total declared capacity of the Cold Storage was 50614 Qtls only. As against this the Storage Capacity of the Cold Storage is 53989.4 Qtls, the actual load was 56607.48 Qtls. Thus the Cold Storage was overloaded.
His investigation found that:
Most of the potato stored in Chamber No. 2 and part of the potato stored in Chamber No. I had to wait at the Cold Storage gate for more than two weeks in the open sun. Potato was not pre-cooled before loading in the chambers. The potatoes remained under sun for days and days and resulted in heating of potato. Long time sun heated potato is liable to deterioration faster, if the chamber temperature goes higher than 40 deg. F. The insured has been negligent in running the Cold Storage. The insured submitted log sheet with incorrect temperature reading. The insured did not inform about the compressor breakdown on 19.9.2008 till 3.10.2008. The insured did not inform of potato sprouting till 13.10.2008 when it was noticed on 8.10.2008. The insured did not inform the hirers about the conditions of potato in the advertisements issued and letters sent under postal certificate, in spite of his written advice.
The Surveyor thus concluded that the sprouting could have taken place only due to higher humidity and temperature in the chamber, which however does not tally with the dry and wet bulb temperatures recorded in the log book. The Surveyor has quantified the amount of loss. The amount of loss is not more than Rs.60,57,157/- as assessed by the final Surveyor, but he clearly stated that the claim is not payable.
Based on the report of the Surveyor, vide letter dated 14.09.2009, the Insurance Company repudiated the claim of the Complainant. The main grounds on which the claim has been repudiated are as follows:-
1. The insured did not pre-cool the potatoes before loading partly.
2. The insured submitted log sheet with incorrect temperature reading.
3. The insured did not inform about the compressor break down on 19.09.2008 till 03.10.2008.
4. The insured did not inform of potato sprouting till 13.10.2008 when it noticed on 8.10.2008.
5. The insured did not inform the hirers about the condition of potato in the advertisements and letters sent under postal certificates.
Sprouting could have taken place only due to higher humidity and temperature in the chamber which, however, does not tally with the dry and wet bulb temperature recorded in the log sheets.
We have perused the records and reports as well as heard both the parties and gone through the evidence adduced by them.
The Complainant has taken two insurance policies, one, for deterioration of stocks and other, for the machinery. As for the damage to the machinery, the OP Insurance Company has settled the claim of the Complainant. However, reimbursement of the cost of repairs of machinery does not by itself support the claim in respect of damage to stocks. On 13.10.2008, the Complainants requested the Insurance Company for inspection of stocks of potatoes insured by them, as there was rotting and sprouting in about 30,000 quintals of potatoes. The Complainant observed the damage on 08.10.08 but intimated it to respondents only on 13.10.08. The Complainant thus did not comply with the condition no. 4 of the Policy, which is reproduced below:-
'In the event any accident (a) the insured shall give immediate notice thereof to the office of the Company which has issued the Policy by telephone or telegram and followed by a letter confirming such intimation……..'
The Complainant submitted log sheets to the Surveyor which showed that the Cold Chamber Dry bulb temperature has been below 40 degree F from the time of loading up to 14.10.2008 in Chamber no. 2 and up to 19.10.2008 in Chamber no. 1. This has not been denied by the Complainant. The letter dated 25.2.09 of the Surveyor further refers to Complainant's letter dated 14.10.2008 by which it was confirmed that the Chamber temperature was always normal i.e. within 40 degree F during the holding down / storage period. However, the Complainant denied vide letter dated 13.1.2009, that the temperature was maintained in both the chambers till the germination in the potato. In a subsequent meeting and statement on 17.2.2009 the Complainant stated that during September & October he checked the log books
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and found that the operators had made wrong entries. It all appears to be an afterthought. The Complainant has failed to provide the Surveyor evidence in support of the said statements. Loss was not accidental but shows lack of supervision by the Complainant. It is very clearly mentioned in the DOS Policy under exceptions (vi) that the Company shall not be liable for any damage if the temperature in the Refrigeration chambers does not exceed 4.4OC. It has also been very clearly brought out in the report of Licensed Surveyors, who have submitted a very detailed report, that the loss is due to improper maintenance of the cold storage and gross negligence on the part of the Complainant and therefore, is not admissible under the terms and conditions of insurance policy. There is therefore no deficiency in service of the OP Insurance Company and the complaint is not maintainable. The Complainant is squarely responsible for the loss caused to the stocks of potatoes due to poor maintenance and gross negligence. Improper loading, overloaded improper stacking and management of stocks, inordinate delay in repair of machinery have all contributed to the damage to the stocks and the Insurance Company therefore has not erred in repudiating the claim under DOS Insurance Policy. In view of above, the complaint is hereby dismissed with no order as to costs.