DELKON (INDIA) PVT. LTD. vs Oriental Insurance Company Ltd

THE Complainant had undertaken a contract with the Visakhapatnam Steel Project for supply of equipment and erection of Coal Handling Plant and coke handling facilities. THE total value of the contract awarded to the Complainant was Rs. 1.26 crores (approximately). He obtained an all risk insurance policy from the Opp. Party for the whole value of the contract in 1985. THE insurance policy was jointly in favour of the Complainant as the Contractor and the Visakhapatnam Steel Project as the principal.

DURING the execution of the contract, the Complainant suffered certain losses from time to time and he lodged a report for the same within stipulated time with the Opp. Party-Insurer. The total amount of the 9 claims lodged on different counts on various dates in 1989 and which are still outstanding comes to Rs. 16,66,211/-. The Opp. Party-Insurer in its counter affidavit has furnished the present position of 8 of these 9 claims lodged in 1989, and which according to the Insurer were pending in October 1991. The Opp. Party-Insurance Company has furnished the status of each of these cases.

Two of the claims lodged on 23.5.1989 (damage to T&P during accident) for Rs. 39,152/- and (damage to flexible connections during testing) for Rs. 68,376/- had been settled.

ONE claim for leakage of lubricants during testing for Rs. 1,60,620.50 has been repudiated in November, 1990. So at the hearing the question regarding remaining 5 claims was taken up for consideration. In the case of claim relating to damages to the Chain Pulley blocks due to fall from height during erection the surveyor had stated in his survey report that he could not see the damage physically as the damaged Chain Pulley block had been repaired before he could undertake the survey. He had only seen the repaired Chain Pulley blocks and also there were no photographs of the damaged Chain Pulley block. He had, however, assessed the claim at Rs. 30,560/-. The Opp. Party Insurer had refuted this claim on the ground that there was no proof of damage particularly because the surveyor could not see the damaged property. To a question from the Commission it was clarified that the surveyor was appointed after 4 months of the report of the damage i.e. in February, 1990. The Complainant could not wait for such a long time to keep the damaged property in its original condition and not carry out repairs. This would have obviously hampered his execution of the contract with Visakhapatnam Steel Project.

ANOTHER claim relates to damage to ducts during testing. The surveyor in his report had assessed the damage at Rs. 78,000/- but here again he could not inspect the damage physically as the damaged duct had been replaced before the surveyor , could reach the place of inspection. In consequence the liability was denied. On enquiry from the Opp. Party-Insurer it was disclosed that the surveyor was appointed 8 months after the report of the accident. It could not be explained as to why the Insurer should take such a long time to appoint the surveyor and whether he expected the Insured to keep the damaged property without repairs and in consequence default in his construction contract. We have no doubt that there was an unjustified and inordinate delay in appointing surveyor in respect of the two claims cited above and thus there was deficiency in service. The reasons stated for repudiation are not valid or tenable. The two claims as assessed by the surveyor are allowed. Two other claims (Rs. 2,50,811/- of 26.4.1989 and Rs. 3,17,643/-of 15.6.1989) relate to the loss due to theft of property from the site. In both these cases the Complainant-Insured had lodged FIRs with the Police but the claims have not been settled by the Insurer on the ground that there was no final Police investigation report in the absence of which they were unable to make good the loss.

WE find that in the case theft claim for Rs. 2,50,811/- of the Complainant Insured, the surveyor had assessed the loss payable at Rs. 1,79,293/-.

THE Complainant had lodged FIR immediately but has not received the final report from the Police. THEre is no contractual obligation under the policy of insurance for the Insured to produce the final investigation report from the Police. As regards the second case of theft according to the Opp. Party Insurer, the claim of the Complainant-Insured was Rs. 2,76,006/- only. The surveyor assessed the net claim payable at Rs. 1,80,120/-. The Police had furnished their final report "undetectable" on 16th November, 1989. A photo copy of the Police report has been filed by the Complainant in this case.

We are, therefore, of the view that there has been deficiency in service on the part of the Opp. Party - Insurance Company where the Complainant-Insured has lodged the FIRs with the Police in time and either the Police have furnished report that the theft was undetectable or furnished no report even after the elapse of reasonable time. The Complainant cannot be denied his claim under the policy of insurance on the ground that the final Police report was not forthcoming. The Complainant-Insured has done what all he could do or is required to do under the policy of insurance to maintain his claim. So we allow the claim as assessed by the surveyors in both the items.

THE eighth claim relates to loss due to leakage of lubricants during the testing which had to be replaced. THE value of this loss was assessed at Rs. 1,60,620/-. According to the Opp. Party-Insurance Company the loss of oil occurred due to prolonged storage and the loss was because of the "inherent property" of he oil. It has therefore, rejected this claim. On the face of it the repudiation by the Opp. Party-Insurance Company appears to be justified. The 9th claim lodged by the complainant: damage of Bends of DPT Lines detected during Testing vide claim No. 33250/3/152/Misc/27/ 91/EAR for Rs. 3,90,373.82/-vide item 6 of Annexure ''C Page 20 of the Paper Book. According to the complainant, the surveyor had recommended the payment of Rs.3,25,000/- against this claim. The reply of the Opp. Party Insurer is silent on this claim though it has taken cognizance of the claim vide para 10(9) of its reply. The complainant has pressed for this claim as it has not been denied and according to him it will be deemed to be admitted as assessed by the surveyor. We agree with his contention.

IN the light of the above we direct that the amounts of the insurance claims as admitted by the surveyor appointed by the Opp. Party-INsurance Company in the five cases amounting in all to Rs. 7,92,973/- as detailed above are allowed. The Complainant-INsured will also be entitled to interest at the rate of 18% on these amounts after expiry of a period of one month of the surveyor''s report. Complaint allowed.