The complainant, Vidyapati Cold Storage Private Limited, is a company registered under the Companies Act, 1956 and is engaged in the business of providing storage facilities of potato under refrigerating conditions, after taking rent and preservation charges from the users of the facility. The registered office of the company is stated to be in Kolkata, West Bengal and its operations are done at Bilkishunpur Madwa, P.O. Vidyabati Nagar, District Samastipur in Bihar.2. The complainant purchased four insurance policies from the OP, Oriental Insurance Company Limited. Policy No. 2006/08 was obtained to take care of the deterioration of potato stocks and the coverage was from 02.05.2005 to 01.12.2005. The second policy bearing No. 2006/27 was ‘Standard Fire and Special Perils policy (material damage)’ with insurance cover from 25.05.2005 to 24.05.2006. The third policy No. 2006/12 was also ‘Standard Fire and Special Perils policy’, valid from 02.05.2005 to 01.12.2005, which included special clause for deterioration of stocks due to power failure at the cold storage. The 4th policy was machinery break-down policy no. 2006/10 with insurance cover from 25.05.2005 to 24.05.2006. It has been stated in the consumer complaint that the plant had been running in good condition with well-maintained temperature, but between 14.05.2005 till 23.07.2005, there were continuous and several break-downs, involving the functioning of DG sets, which resulted in damage to the stocks kept at the premises. A 200 KVA DG set broke down on 06.06.2005 at 10:10 AM which was attended to by a mechanic on 08.06.2005. On intimation being given to the OP Insurance Company, a surveyor visited the cold storage on 11.06.2005. There is a letter from the surveyor addressed to the complainant dated 11.06.2005, according to which the surveyor demanded certain documents from the complainant. The complainant took another DG set of 187 KVA from M/s. Barman & Co., but the said generator set also broke down on 23.07.2005. it is stated in the complaint that the plant remained fully non-functional from 23.07.2005 to 25.07.2005 and the temperature rose to 43OC as well. They arranged a 380 KVA Cummins Kirloskar DG set, as transferred from their Head-office to the plant at Samastipur. Further, on 21.08.2005 at around 10:20 PM, there was rain in the area with heavy thunderstorm and lightning. The lightning caused damage and cracks in the walls of chambers 4, 5 & 6, resulting in loss of cooling. The temperature went rising, hour by hour, till 25.08.2005, until some repair work was done. However, the potatoes inside the chamber got germinated and this fact came to the knowledge of the complainant when roots came out of the chamber. The same was informed to the insurance company vide letter dated 04.10.2005 with regard to policy No. 2006/08 concerning the ‘deterioration of stocks’. The surveyor Girin Kumar Sinha appointed by the Insurance Company inspected the cold storage on 08.11.2005 and found damage to three gensets, leakage in the chamber and germination of potato stocks. A letter dated 22.10.2005 with regard to germination of stocks was also given to the insurance company. The details of stock position etc. was intimated to the surveyor vide letter dated 05.11.2005 and then vide letters dated 07.11.2005 and 21.12.2005. However, despite the necessary documents and information supplied to the surveyor from time to time, the Insurance Company failed to settle the claim and adopted delaying tactics. On the other hand, the hirers of the cold storage started sending legal notices to the complainant and hence, the company was forced to make payment to the hirers from their own pockets, which resulted in loss of money and reputation for them. The complainants then made the consumer complaint in question, claiming a sum of Rs.2.82 crores under the policy for deterioration of stocks (Policy No. 2006/08 and a sum of Rs.85.77 lakhs under the machinery breakdown policy (No. 2006/10), in addition to penalty of Rs.50 lakhs for deficiency in service, Rs.1 lakh as compensation, harassment and Rs.50,000/- as cost of litigation. The complainant demanded a total sum of Rs.3,74,27,000/- alongwith interest from the OP Insurance Company.
3. The complaint was resisted by the OP Insurance Company by filing a written statement in which they took the preliminary objection that there was no deficiency in service on their part as they had rightly repudiated the claim and communicated to the complainant vide letter dated 05.03.2008. The complainant was fully aware about the repudiation of their claim on 25.05.2008, when the complaint in question was filed. The Insurance Company also stated in their reply that as per warranty No. 9 of deterioration of stocks (DOS) policy, the complainant was required to intimate in writing to them about any abnormal operating conditions, but the complainant had failed to do so. Although, the complainant has mentioned about several breakdowns from the month of May, 2005, they gave intimation to the Insurance Company on 04.10.2005 for the first time, i.e., after a gap of nearly four months about the deterioration of stocks only, and hence, the opposite party was not given the opportunity to carry out the inspection of the plant at the appropriate time.
4. As per condition No. 6(a) (i) & (ii) of the machinery insurance policy also, it was the duty of the insured to inform the OPs about the nature and extent of loss immediately and file claim with documentary evidence within 15 days, otherwise the OP was absolved from their liability to pay the claim. Moreover, the complainant did not lodge any claim under the machinery break down policy. It was also clear that the insured did not take steps for proper maintenance of plant and for stopping the aggravation of loss and hence, the complaint was liable to be dismissed. The preliminary surveyor had found cracks and leakage in chamber No. 6 only, and the OP would be liable, if found so, for the stock in that chamber only. The Insurance Company also took the preliminary objection that the matter could not be resolved in summary procedure under the Consumer Protection Act, 1986 and hence, the proper form to take its cognizance was a civil court of competent jurisdiction.
5. In their reply on merits, the Insurance Company took the stand that after examining the relevant documents and terms and conditions of the policy, the claim was found to be ‘not payable’. The surveyor, M/s Associated Surveyors and Consultants, who were appointed on 07.10.2005, gave report on 28.06.2007 and based on that report, the claim was found not payable. The surveyor observed in the report that the insured was not clear about the exact cause of loss, whether it was due to lightning or due to the breakdown of a number of DG sets. They had been presenting different version from time to time about the cause of loss.
6. The complainants filed their rejoinder to the written reply to the OP and also filed their affidavit by way of evidence. The OP Insurance Company also filed their evidence affidavit, which is on record. The learned counsel for both the parties were heard at length during arguments before us.
7. The main issue that merits our consideration is whether the complainant Company is entitled for payment of claim from the OP Insurance Company for the alleged deterioration of potato stocks or for damage to machinery etc. In this regard, the report submitted by M/s. Associated Surveyors and Consultants dated 28.06.2007 is a material document in the issue involved. It has been stated in para 6.03 of the said report as follows:-
'The Insured has surrendered the electricity load connection due to low voltage and irregular power supply by the Bihar State Electricity Board. The electric supply connection of the cold storage was disconnected on 07th May 2005 by Bihar State Electricity Board.'
8. Interestingly, there is no mention in the consumer complaint anywhere that the complainant got the electric connection of the factory disconnected from the Bihar State Electricity Board. The case of the complainants is that their plant was running in good condition with well-maintained temperature, but from 14.05.2005 till 23.07.2005, there were continuous and several break-downs, leading to damage to the stocks. As per the details given by the complainant in the documents submitted, 125 KVA DG set broke down on 14.05.2005 at 7:35PM and a 200 KVA DG set broke down on 06.06.2005 at 10:10AM and the same was attended to by a mechanic on 08.06.2005. Thereafter, the complainant took on rent another DG set of 187 KVA from Barman & Co. Howrah, but the said DG set also broke down on 23.07.2005 at 9:30PM. It has been stated in the consumer complaint as follows:-
'That the above rented Genset also broke down on 23.07.2005 at 9:30 PM; so from 23.07.2005 till 25.07.2005 the plant became fully non-functional. In the meantime, temperature rose to 43 degree Celsius which came down to 40 degree Celsius when one compressor started operating by 125 KVA set but the full plant was fully operated on 29.07.2005.'
9. It is evident from the above facts given by the complainant that the electric connection for the plant in question was disconnected on 07.05.2005 and thereafter, they were depending only on the generator sets for this supply of electricity to the cold storage. The reasons for affecting the complete transition from the use of power supply by the State Electricity Board to the power supplied from generator sets only, have not been adequately explained by the complainant anywhere. It is also not understood that if the power supply from the electricity board was of low voltage and irregular, how the plant was running in good condition with well-maintained temperature, whereas immediately after the installation of generator sets, there were frequent and continuous break-downs. It has also not been clarified anywhere whether any technical assessment about the requirements of such generators was ever made and whether there was any standby arrangement in the eventuality of a generator getting dysfunctional on account of any reason. The complainants should have informed the Insurance Company about the change in the mode of power supply. In any case, it was their duty to inform the insurance company about the break-down of said generators from time to time, but they never did so. It is the own version of the complainants that the plant was fully non-functional for certain dates and the temperature also rose quite high, but they have not stated anywhere as to why they restrained themselves from giving intimation to this effect to the Insurance Company. Further, the complainant has not been able to prove anywhere that they filed any claim with the Insurance Company, claiming damage to the machinery. During the course of arguments also, the complainants failed to furnish any reason for non-submission of the said claim. The OP have, therefore, rightly taken the stand that they were kept in the dark about the damage to the machinery and hence, were not liable to pay any claim for the said damage. We, therefore, have no alternative but to uphold the contention of the Insurance Company that the claim of the complainants demanded through this consumer complaint, under the machinery breakdown policy, is not justified on any ground.10. The complainant stated in the consumer complaint that on 21.08.2005, around 10:20 PM, rain started with heavy thundering and lightning. There was damage to the walls and chambers No. 4, 5 & 6 of the plant due to lightning and cracks also developed in the said chambers, resulting in loss of cooling. The temperature went on rising, hour by hour, till 25.08.2005. Some repair work was done in the chambers; but the air leakage remained, which could not be sealed, until the chamber was fully empty. The potatoes got germinated and it came to the knowledge of the complainant only when the roots came out of the package. The complainant then informed the Insurance Company vide letter dated 04.10.2005 with regard to Policy No. 2006/08. The Insurance Company appointed Mr. Girin Kumar Sinha, to carry out a preliminary survey. In the report submitted by the said surveyor, it was observed as follows:-
'a. Engine of 125 KVA Genset was seized.
b. The Block of 680 KVA Engine was cracked.
c. The Genset of 250 KVA was found not running on full load.
d. There was leakage in 6th chamber.
e. Potatoes kept inside the bags were found germinated.'
11. The said surveyor Mr. Girin Kumar Sinha has, however, concluded as follows in his report:-
'Conclusion / Opinion
In this case, it has been concluded that the claim has been lodged only for the stock of damaged potatoes only and not for the breakdown of the Machinery. Hence, in my opinion, the Insurance Company may take appropriate decision it deems necessary.'
12. The OP Insurance Company have taken the plea that they were informed only about the deterioration of potato stocks vide letter dated 04.10.2005 and no intimation was ever given to them, regarding the break-down of machinery etc. The information about damage to the stocks was also given at much later stage, although the stocks might have got damaged due to rise in temperature on many occasions, following the break-down of the machinery as per the version of the complainant itself. Further, it is an admitted version of the complainant mentioned in the complaint itself that they were told about sprouting from the bags of potatoes in the month of August 2005 and they immediately did 'paltai' (turning of stocks) to prevent the same. They have also stated in a letter dated 07.11.2005 sent to the surveyor that they did 'paltai' of potatoes bags in all the chambers first in the month of June 2005 and then again in September 2005. The exact condition of the stocks was, therefore, very much within the knowledge of the complainant. In spite of this, they chose to inform the insurance company for the first time on 04.10.2005 and they have not been able to provide any plausible explanation for the delay.13. It is the own version of the complainant that the temperature rose as high as 43OC during the period from 23.07.2005 to 25.07.2005 and the plant was fully non-functional during those days. It is clear that there could be damage to the stocks during this period, but the complainant did not pay any attention to it, OR they were unmindful of the fact that the stocks could be damaged due to such rise in temperature. In any case, it was the duty of the complainants to keep the OP Insurance Company informed about the breakdown of the machinery or damage to the stocks.14. The complainants wrote a letter dated 22.10.2005 to the Insurance Company, a copy of which has been placed on record, giving the cause of germination and shrinkage of potatoes. The facts stated in the complaint regarding the break-down of the generator sets from time to time and the rising of temperature from 23.07.2005 to 25.07.2005 and then again in August 2005, have been stated in this letter. It has also been mentioned that when the complainant learnt about the roots coming out of the bags, they informed the insurance company on 04.10.2005. A perusal of this letter confirms that the complainants gave intimation about damage to the stocks to the insurance company first time on 04.10.2005, whereas it was their duty to keep the insurance company informed from time to time as brought out already.
15. It has not been clarified by the complainants anywhere whether the alleged damage to the stocks took place on account of lightning etc. or due to the breakdown of the machinery or both. In any case, if the damage to any part of the plant had taken place, due to lightning etc., the complainant could have produced the necessary evidence to prove that such lightning had indeed taken place. The complainant could have obtained reports from the meteorological department in support of his contention that lightning took place on those dates which might have caused damage to the plant. On the other hand, it has been specified in the complaint that the complainant could not obtain the meteorological report, rather they got report from some village headman and relied upon newspaper reports only. Even if, the loss was due to lightning, it was the duty of the complainant to keep the insurance company informed at every step, so that the said company could have got proper survey done and get the damage assessed from competent technical personnel.
16. It has been laid down in clause 9 of the section, ‘warranties’ of the deterioration of stock policy that the insured was required to forthwith notify the company in writing about any abnormal operating conditions of the refrigeration plant and machinery or stoppage of the function of the cold storage, causing rise or fall in temperatures or any circumstances which may give rise to a claim under this policy. It is obvious that insured has not acted in accordance with the terms and conditions laid down in the policy and hence, the insurance company is not bound to pay the claim to them.
17. It has further been brought out in the report of the surveyor that the complainant was custodian/bailee of the potato stocks kept by the farmers at his cold storage plant. The loss suffered by the insured would be the amount if any paid by them to the depositors whose stocks got damaged
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. However, despite requests and reminders, the insured did not provide details of the claim lodged on them by the farmers and the amount paid to them against such claims. It has also been stated in the report of the surveyor that the potatoes with the initial stage of germination could be used as seed in earlier deliveries to the depositors. However, there was heavy germination in some stocks of potatoes and there was agitation from the farmers at the cold storage in this regard. During the course of hearing before us, the complainant was asked whether they had made any payments to the farmers as compensation for the loss suffered by them. The complainant denied that they had paid any compensation to the farmers, rather stated that the said payment would be made if the present claim against the insurance company was allowed. It is clear, therefore, that the complainant has not made any payment to the farmers so far by way of compensation. Without payment to the farmers, no reimbursement from the insurer can be claimed by the complainant, as the potatoes belonged to farmers and not to the complainant. In fact, during arguments, the complainant also admitted that no suit or other proceedings against them had been initiated by the farmers. The claims of the farmers have since become barred by limitation and cannot be enforced against the complainant. In the eventuality of the claim being allowed and payment made to the complainant by the OP, it shall amount to an unjust enrichment of the complainant and not reimbursement to the farmers, therefore. 18. For the reasons stated above, we do not find any merit in this consumer complaint and no part of the claim is payable to the insured because of violation of the terms and conditions of the policy. It is held, therefore, that the claim has been rightly repudiated by the Insurance Company. The consumer complaint is, therefore, ordered to be dismissed with no order as to costs.