Kanoria Chemicals and Industries Ltd. vs National Insurance Company Ltd.

-COMPLAINT was filed, inter alia, alleging that the complainant is having one of its manufacturing units at Renukoot (U.P.). This unit produces caustic soda, stable bleaching powder, lindane, etc. Complainant had taken Fire C Policy No. 100200/II/93/3400008 dated 12.7.1993 for Plant and Machinery, etc. installed in the unit for Rs. 55.00 crores. L.O.P. Policy No. 10020/II/93/3400009 dated 2.4.1993 for Rs. 17.37 crores was further taken from the opposite party-Insurance Company. Power in the unit was synchronised through the two transformers which were installed inside the factory and were covered by the Material Damage policy. On 6.9.1993 at about 1.20 p.m. one of the transformers (B.B.C. make) became inoperative due to explosion. Opposite party was intimated of the explosion through the letter dated 7.9.1993. Opposite party appointed A. Patranabis, as preliminary Surveyor who visited the unit on 12.9.1993. He inspected the transformer and the explosion site. It was further alleged that S.C. Khurana of M/s. GEC Alsthom, internationally known manufacturer of such equipment reached the site on 9.9.1993 and carried out various tests. His report dated 10.10.1993 was made available to the opposite party. B.A. Subramaniam, Chief General Manager of GEC-Alsthom, an expert agreed by the conclusion drawn by S.C. Khurana that the damage to the transformer was because of bolt falling on the live winding of ''R'' Phase which caused the explosion and subsequent damage. S. Dareshwar of M/s. Asia Brown Boveri, manufacturer of the transformer also visited the site and carried out various electrical tests. Damaged transformer was later on shifted to the works of M/s. GEC Alsthom Ltd., Naini for the purpose of carrying out repairs, if possible. In the meantime, Insurance Company appointed M/s. Mehta and Padamsey Surveyors (P) Ltd. as Joint Surveyor. S. Arunachalam of this Surveyor Company inspected the damaged transformer at Naini on 18.11.1993. A. Patranabis also inspected the damaged transformer at Naini on 18.2.1994. Complainant sent the copy of survey report dated 26.9.1997 of M/s. Associated Surveyors to the opposite party. It was pleaded that opposite party-Insurance Company have not rejected the complainant''s claim. Damage to the transformer as a result of explosion is covered by the fire ''C'' policy. Consequent to the explosion, the complainant has suffered loss. Para No. 20 of the complaint dealing with the loss allegedly suffered by the complainant is reproduced below: "20(i) Loss assessed by the Surveyors (without prejudice)- (a) For Machinery damages under Fire ''C'' Policy Rs. 6.82 lacs (b) Loss under LOP Policy Rs. 41.34 lacs (ii) For determining the consequential loss under LOP Policy, the Surveyors have not taken into account the cost of transformer incurred to mitigate the loss which should be treated as an additional expenditure necessarily and reasonably incurred for the sole purpose and to diminish the reduction in output which, but for this expenditure, would have taken place during the indemnity period. This has been clarified by the insured vide letter No. KCL/Claim/4230 dated 27.11.1997 to the Insurer (Annexure-12). Thus, the total claim comes to Rs. 112.08 lacs (iii) Interest @ 18% upto 28.2.1998 on the above works out at Rs. 134.60 lacs Total: Rs.246.68 lacs

IT was prayed that opposite party be directed to pay amount of Rs. 246.68 lacs including interest @ 18% p.a. upto 28.2.1998 as also interest at the said rate from 1.3.1998 till date of payment in addition to cost of Rs. 1,20,000. Opposite party contested the complaint by filing written version. It was alleged that the complaint is barred by limitation as it was filed on 6.3.1998 while the incident had occurred on 6.9.1993. Complaint was alleged to be barred by condition No. 6(ii) of the policy. It was not denied that Fire ''C'' Policy for the period from 1.4.1993 to 31.3.1994 for buildings, plant and machinery for Rs. 55.00 crores was issued by the replying opposite party to the complainant subject to the terms, conditions and the exclusions and the relevant exclusion clause reads thus: "This insurance does not cover: .................... (g) Loss of or damage to any electrical machine, apparatus, fixture, or lifting (including electric fans, electric household or domestic appliances, wireless sets, television sets and radios) or to any portion of the electrical installation, arising from or occasioned by overrunning, excessive pressure, short circuiting, arcing, self-heating or leakage of electricity from whatever cause (lightning included) provided that this exemption shall apply only to the particular electrical, machine, apparatus, fixtures, fitting or portion of the electrical installation so affected and not to other machines, apparatus, fixture, fitting or portion of the electrical installation which may be destroyed or damaged by fire so set up."

In addition to the said policy, the replying opposite party also issued consequential loss policy renewed by the interim protection Note No. 1/34/00009 dated 2.4.1993 for a sum of Rs. 17.37 crores for the period from 1.4.1993 to 31.3.1994. On receipt of intimation of the incident on 7.9.1993, the answering opposite party appointed A. Patranabis as a preliminary Surveyor on 14.9.1993. He submitted the preliminary report dated 18.9.1993 to the opposite party on 20.9.1993. A. Patranabis asked the complainant through the letter dated 23.9.1993 to supply documents along with duly filled in and signed claim form and complete the survey. Details of the documents to be filed by the complainant have been set out in para 2.4 of the written version. It was further alleged that in order to expedite the survey, the replying opposite party appointed M/s. Mehta and Padamsey Surveyors (P) Ltd. as Joint Surveyor with A. Patranabis for final survey and appointment was conveyed to the said Surveyor through the letter dated 8.11.1993. It was pleaded that A. Patranabis carried out detailed inspection of the damaged transformer on 18.2.1994 at the works of M/s. GEC, Alsthom Ltd. at Naini after complete windings with core were taken out from the transformer tank. In report dated 21.2.1994, A. Patranabis concluded that due to accidental dropping of M.S. bolt from the top frame structure of the core on ''R'' phase of H.T. winding inter-turn short circuit followed by severe flashover which caused breakdown of the unit. There was no evidence whatsoever of the explosion either in the form of detonation or bursting, rending or tearing apart. In the joint meeting on 29.11.1994, the Surveyors explained the cause of damage as short circuit and further issued clarificatory letter dated 16.2.1995. It was also stated that the opposite party through the letter dated 31.10.1995 asked the Surveyors to make the final assessment report without prejudice under both the policies. M/s. Mehta and Padamsey Surveyors Pvt. Ltd. issued the final report on 24.4.1997 on consequential loss policy without prejudice to the rights and contentions of the parties subject to the admissibility of the claim under the conditions of policy. Said two joint Surveyors further submitted their final report dated 30.7.1997 in respect of Material Damage policy issued in respect of plant and machinery and electrical installations. In this report, the joint Surveyors stated that the evidence clearly established that the damage to the transformer was attributable to short circuiting. It was further alleged that as the complainant was already having a surplus capacity, after replacing the damaged unit it did not get repair the damaged transformer. Even if the claim is covered under the policy, the opposite party''s liability would not exceed Rs. 6,84,933 subject to excess clause. Loss due to short circuit falls under the ''Exclusions'' in terms of the insurance policy. Liability to pay the claimed amount was emphatically denied.

WE heard Mr. S. Raghavan for the complainant and Mr. Vishnu Mehra for the opposite party. Written submission have also been filed by them. In written version, the opposite party has taken two-fold preliminary objections in regard to complaint being barred by limitation and it being barred by condition No. 6(ii) of the policy. On plea of limitation, it was alleged that though the incident had taken place on 6.9.1993 but the complaint was filed on 6.3.1998 much beyond the period of two years stipulated by Section 24A of the Consumer Protection Act, 1986 (for short the Act). It is not in dispute that the claim has been repudiated through the letter dated 27.12.1999 by the opposite party-Insurance Company after the filing of complaint. Limitation of two years will, therefore, start running from the date of repudiation of claim and the complaint filed in March, 1998 is within limitation.

COMING to another preliminary objection, the condition No. 6(ii) of the policy runs as under: "In no case whatsoever shall the company be liable for any loss or damage after the expiration of 12 months from the happening of the loss or damage unless the claim is the subject or pending action or arbitration. It being expressly agreed and declared that if the company shall disclaim liability for any claim hereunder and such claim shall not within 12 calendar months from the date of the disclaimer have been made the subject-matter of a suit in a Court of law. Then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable here-under."

It is admitted by the opposite party that the intimation of the occurrence dated 6.9.1993 was received by it from the complainant through a letter on 7.9.1993. Annexure-5 is the copy of this letter which was filed along with the complaint. This letter would show that besides informing of the said incident the opposite party-Insurance Company was requested to register the claim under the two policies. Since the claim made remained pending action at the end of the opposite party - Insurance Company till it was repudiated by the letter dated 27.12.1999, the bar of condition No. 6(ii) will not be attracted. Date submission of claim statement has no relevance whatsoever. Decision in National Insurance Co. Ltd. v. Sujir Ganesh Nayak & Co. & Anr., II (1997) CPJ 1 (SC)=(1997) 4 SCC 366, has no applicability to this case. Complainant alleges that the damage to the transformer was caused on account of explosion. On the contrary, the opposite party alleges that damaged to the transformer was due to short circuit. In support of the complaint, the complainant has filed by way of evidence the affidavits of T.D. Bahety, Chandra Prakash, S.K. Mishra and S.C. Khurana. Affidavit of S. Arunachalam has been filed by the opposite party in support of the written version. Only the affidavits of Chandra Prakash, S.K. Mishra and S.C. Khurana are material on the issue on hand. In his affidavit Chandra Prakash averred that on 6.9.1993 he was the Foreman (Elec.) of the complainant-Company and was on duty. At 1.20 p.m. he heard a loud sound from 132 KV Switch Yard and simultaneously there was total power failure. He rushed towards the Yard and found lot of oil around the 132 KV 12.5 MVA BBC transformer. He immediately informed S.K. Mishra on telephone who reached the site immediately. Oil had splashed through the explosion vent pipe and its cover got thrown due to the pressure of explosion. To a question put in cross-examination how did he conclude that damage was caused due to explosion in transformer, he replied that the lid of vent pipe being thrown away and there being spillage of oil all over and loud noise led him to conclude that damage was due to explosion. In his affidavit S.K. Mishra averred that he was the Superintendent Engineer (Electrical) of the complainant-Company. On 6.9.1993 at around 1.20 p.m. on receiving telephone from Chandra Prakash he reached the site. S.C. Khurana of GEC-Alsthom, an internationally reputed manufacturer of such transformers who have their workshop at Naini (U.P.), was called to inspect the transformer. On 9.9.1993, Shri Khurana conducted preliminary tests along with three other persons of the complainant Company. Since the nature of fault and the place could not be located then and there, the transformer was transported to the works unit of G.E.C. Alsthom at Naini. In case of any short circuit in the transformer the Differential Relay DDT32 installed would have detected it and forced the transformer to trip. In addition, the transformer had over current, earth fault, directional earth fault relays. He further averred that in an ''explosion'', ''rendering'', ''tearing apart'', etc. is not a necessary concomitant as generalised, by the Surveyors. In short circuit, any electrical system is of phase to phase or phase to ground. In the transformer, there was no evidence of such fault. Only inter-turn fault in ''R'' phase was seen. In cross-examination, he admitted that he was not at the works of the GEC Alsthom when the transformer was untanked for inspection. He denied the suggestion that inter-turn short circuit was due to falling of MS bolt. According to him, if there is a bolt falling in that very circuit and bolt touches a peneturns of that very circuit will not lead to short circuit in respect of phase to phase or phase to earth fault. In a transformer, there are three phases-one is "R" phase, the second is "Y" phase and third is "B" phase. In this case, the bolt touched turns of "R" phase only. He denied the suggestion that he has attempted to mislead the Commission by telling half truth. In his affidavit S.C. Khurana stated that he is the Manager, Transformer Testing, GEC Alsthom, Naini, U.P. which is in the business of supplying and servicing of transformers. He is B.E. (Electrical Engineer). GEC alsthom received information from the complainant about the damage to the transformers. He is B.E. (Electrical Engineer), GEC alsthom received information from the complainant about the deamage to the transformer on 6.9.1993 and the complainant requested GEC Alstom to depute a person to inspect the transformer. He reached the plant site at Renukoot on 9.9.1993 at 10.00 a.m. and inspected the damaged transformer in the presence of senior officers of the complainant Company. The exact nature of fault and place could not be located on preliminary tests. Transformer was, therefore, shifted to GEC Alsthom Works at Naini. Detailed investigatins after lifting core and coil were carried out in October 1993 and investigation report dated 10.10.1993 was submitted to the complainant. A big visible burnt mark was seen on left side of "R" phase of H.V. winding as viewed from LV terminal side. Few turns of the HV winding were found damaged at right side of the winding while viewed from HV terminal side which resulted in open circuiting of "R" phase winding. A bolt was found missing from the top buffer above the "R" phase winding on the LV terminal side and was lying on the bottom yoke clamp. Burning marks were seen on the bolt. Bottom portion of the ''R'' phase HV winding had been displaced and shifted up by a few centimetres. In his opinion, the damage was because of bolt falling on the live winding of ''R'' phase, which caused the explosion and subsequent damage to the winding. His finding was agreed to by B.A. Subramanyam, Chief General Manager of GEC Alsthom who is himself an expert in the field. Failure of the transformer was because of inter-turn fault in the winding because a bolt fell on the two consecutive turns of the winding resulting in excessive circulating current in the particular zone which led to the explosion of the transformer. He also stated that short circuit failure in the transformer occurs because of the outside faults in supply system which causes fault between phase and/or ground. Since the fault in this case is not of this nature, it was only inter-turn fault. So, in his opinion the fault had not occurred due to short circuit. Cross-examination of this witness recorded in question and answer form need be referred to in detail. Relevant questions and their answers are reproduced below: Ques: You have used the term "inter-turn fault" in para No. 20 of your affidavit. But, have not clearly specified the nature of fault. Is it anything different from internal inter-turn short-circuiting? Ans: There can be difference in the two expressions. If the two turns are directly shorting then it can be called a direct inter-turn short. Because, in this case, a bolt was entangled there could have been a gap between the turns which have reduced through the bolt causing excessive current through the bolt to the other turn causing the damage. Ques: I put it to you that even in that case it will be a case of short-circuiting? Ans: In transformers short-circuit failure altogether a different thing. Short circuit failure means outside phase to phase shorting or phase to ground. Then, this terminology of short-circuit failure is called. The standard for transformers is 2026 which specifically calls for short-circuit test of a transformer which every transformer normally is designed to be protected. Ques: I put it to you even an internal shorting is called short-circuit? Ans: In my 35 years of experience, I have never come across such usage of short-circuiting for the internal inter-turn faults. Ques: I put it to you there are many such cases and they are called short-circuit failures? Ans: Not to my knowledge. Ques: With reference to para 12 of your affidavit, can you state how big was the burn? Ans: It can be 2 to 3 inches in diameter. Ques: I put it to you that the effect of the burn mark was local? Ans: It was local. But travelled all along the winding. Ques. Is it not a fact that transformer is intact in this case? Ans: Yes. Ques: Is it also a fact that almost all windings are fully intact, except a local damage to R-field of HV winding? Ans: I have already told that there is big damage in the winding. Ques: I am putting it to you, these photographs clearly show that the damage was that almost all the windings are fully intact except a small local damage in R-field of HV winding and a small displacement of some winding? Ans: It is incorrect to suggest that I have already answered this question. Ques: I put it to you that all the components of the transformer are in order? Ans: It is not correct. Ques: How could you come to the conclusion that there was explosion of the transformer? Ans: I had not heard the explosion. When I reached the site, after 9th September, all these things had already happened. I have tested the transformer and reached the conclusion that there is a damage in the windings. After the transformers are brought to our factory the core winding was taken out and inspected. After inspection a report was prepared on 10.10.1996 which is already attached here. Based on this report and the people who were there at site I have concluded accordingly in my affidavit. Ques: There is absolutely no evidence of explosion and it is only fiction or your imagination? Ans: I have already answered this question. Ques: I put it to you that the loud sound and splashes out of coil has also occurred due to overpressure, due to short-circuit and splashing? Ans: In the whole report, what we were discussing is based on the conclusion how the fault has happened. Because of whatever already talked excessive circulating current and inter-turn fault has been created which is developing excessive pressure inside which resulted in explosion. Ques: Your theory of explosion has been developed only to help the complainant so as to get the insurance claim. Ans: It is incorrect to suggest so and it is not my theory.

AS against this, in his affidavit S. Arunachalam averred that M/s. Mehta and Padamsey Surveyors Pvt. Ltd. was appointed as joint Surveyors in respect of the material damage claim along with A. Patranabis, Surveyor. The opposite party also appointed the Company as Surveyors under the consequential loss policy. A. Patranabis visited the place of occurrence on 12 3.1993 and submitted his preliminary report dated 18.9.1993 Exh OPW1/1. On contacting the Head Office of the complainant at Calcutta, he learnt that the damaged transformer was lying in the shop floor of GEC Alsthom workshop at Naini. He visited that place on 17, 18 and 19th November, 1993. While at GEC Alsthom, he found that the transformer was untanked and the core and windings were kept separately within the shop floor. He carried out inspection in the presence of T.D. Bahety, B. Subramanyam and S.C. Khurana. Photographs taken of the core and windings of the transformer focussing on the damage were duly forwarded by the complainant along with the covering letter dated 25.11.1993. He collected the bolt which had come out of its position and part of three H.T. coils opened out and those were packed and sealed. A. Patranabis visited Naini Works of GEC Alsthom independently on 18.2.1994. Exh. OPW1/2 dated 30.7.1997 is the final survey report on material damage. He further averred that he had examined the investigation report dated 10.10.1993 of S.C. Khurana of GEC Alsthom after the opening of transformer and has commented on the contradictions in the said final survey report vide para Nos. 25 and 26. Exh. OPW1/5 is the report in regard to consequential loss policy. When cross-examined, he admitted that he is not an Electrical Engineer and did not have any specific qualification except B.Sc. (Physics). He admitted that he did not submit any report between September 1993 till 30th July, 1997 and did not have personal knowledge about the facts stated in the report dated 18.9.1993 except through the minutes and the report sent by A. Patranabis. It is further in his cross-examination that he relies upon the report of A. Patranabis dated 18.9.1993 but it was one of the documents of evidence which was examined by him. He admitted that he was not there when A. Patranabis visited Naini Works and that his report is based on the report given by A. Patranabis. Volunteered it corroborates the understanding of the cause of occurrence. He denied the suggestion that A. Patranabis gave the opinion that damage was caused by explosion. He admitted that the opposite party-Insurance Company had asked him to take advice of a consultant to ascertain the exact cause of occurrence. He had taken the advice of consultant-A. B. Upadhyay but he was not taken to the site. Shri Upadhyay did not inspect the transformer. It is further in his cross-examination that generally Surveyors do not submit report unless the claim statement is received and in present case claim statement was submitted in the month of May 1997 and thereafter the final report was submitted in July 1997. In the report, claim has been quantified subject to the policy condition and to that extent claim has been accepted by the complainant.

CONTROVERSY in the present complaint revolves around the issue if the damage to the transformer on 6.9.1993 was caused on account of explosion or due to short circuit. In case the damage was due to short circuit, the opposite party - Insurance Company is not liable to pay the claim being covered by the ''Exclusion'' clause of policy. On inspection of the damaged transformer at the works of GEC, Alsthom, Naini, a big burnt mark was seen on left side of ''R'' phase of H.V. winding; H.V. winding was found damaged at right side; a bolt was found missing from the top buffer above the ''R'' phase winding and the same lying on the bottom of yoke clamp, burning mark was also seen on the bolt and the bottom portion of ''R'' phase HV windings had been displaced and shifted up by a few centimetres. Contention advanced by Shri Vishnu Mehra for the Insurance Company was that the burning marks on the left side of ''R'' phase windings and the bolt and displacement of HV windings of ''R'' phase clearly suggest that the damage to the transformer was due to short circuit and inter-turn fault referred to in the affidavit of S.C. Khurana (CW-4) was nothing but inter-turn short circuit. It was pointed out that alleged explosion would have led to the bursting, rending or tearing of the transformer which was conspicuously absent. According to him, on basis of loud noise and splashing of oil through the vent pipe of the transformer it cannot be presumed that there was explosion in the transformer. In support of incident being due to short circuit, attention was drawn to the definition of ''short circuit'' as given in Clause 3.1 of the Guide for Short Circuit Current Calculation in Three-Phase A.C. Systems published by Bureau of Indian Standards, New Delhi. In Clause 3.1 ''short circuit'' has been defined thus : "The accidental or intentional connection by a relatively low resistance or impedance, of two or more points in a circuit which are normally at different voltages." As noticed above, it is in the cross-examination of S.K. Mishra (CW-1) that in a transformer there are three phases-''R'', ''Y'' and ''B''-and the bolt had touched a portion of ''R'' phase only. It is further in his cross-examination that there are generally two reasons for short circuit - one is when there is phase to phase fault and another is when there is phase to earth fault. Further, in reply to a question as to what is meant by inter-turn fault as mentioned in para No. 20 of the affidavit filed by him and if this inter-turn fault is different from inter-turn short circuit, S.C. Khurana (CW-4) replied that there is difference between the two expressions and if the two turns are directly shorting then it can be called direct inter-turn fault. To an another question that even in that case it may be a cause of short circuit, Shri Khurana replied that in a transformer short circuit failure is altogether a different thing, short circuit failure means outside phase to phase shorting or phase to ground shorting. To yet another question that even internal shorting is called short circuit, Shri Khurana stated that in his 35 years of experience he had never come across such a usage of short circuiting in the internal inter-turn faults. At the cost of repetition, it may be stated that the opposite party-Insurance Company has only filed the affidavit by way of evidence of S. Arunachalam, one of the joint surveyors. Towards the beginning of his cross-examination, he has admitted that he is not an Electrical Engineer. Thus, there is absolutely no reason to disbelieve the said part of the depositions of both CW-1 and CW-4 who are experts in their fields. CW-4 was then posted as Manager, Transformer Testing, GEC Alsthom, Naini, who is in the business of supply of transformers. CW-1 was then posted as Superintendent Engineer (Electrical) in the chemical division at Renukoot of the complainant-Company. Indisputably, out of ''R'', ''Y'' and ''B'' phases of the transformer, the bolt from the top buffer had fallen and got entangled in the gap between the turns of ''R'' phase (one winding only). Since remaining phases/voltages ''Y'' and ''B'' were not involved, it cannot be a case of short circuit as per the aforesaid "short circuit" definition. That apart, as already discussed above, in his cross-examination S. Arunachalam admitted that the opposite party-Insurance Company had asked them to take the advice of a consultant to ascertain the exact cause of loss and he had taken the advice of consultant A.B. Upadhyay. To a question if Shri Upadhyay had inspected the transformer, S. Arunachalam answered in negative. For the reasons best known to the Insurance Company, it has neither filed the affidavit of said Shri Updahyay nor examined him as a witness. S. Arunachalam''s statement also does not indicate what was the advice given by A.B. Upadhyay regarding cause of loss to the transformer. Further, in the interim report dated 21.2.1994, A. Patranabis, joint Surveyor along with S. Arunachalam has reached the following conclusion about the cause of damage: "Detailed inspection of damaged HT winding of the transformer reveals that due to accidental dropping of M.S. bolt from the top frame structure of the core on ''R'' phase of HT winding inter-turn short circuit followed by severe flashover occurred which cause breakdown of the unit."

Obviously, this interim report was submitted after S.C. Khurana''s report dated 10.10.1993. In support of the above conclusion neither the affidavit of A. Patranabis has been filed nor has he been examined as a witness by the opposite party. In his cross-examination, S. Arunachalam has admitted that the final joint survey report dated 30.7.1997 is mainly based on the report given by A. Patranabis. Preliminary survey report dated 18.9.1993 has little relevance on the issue on hand as by that time the transformer had not been opened at the Naini works to ascertain the exact cause of damage. Aforesaid conclusion reached by A. Patranabis is, therefore, not substantiated by cogent evidence. Moreover, in view of the depositions of CW-1 and 4 that conclusion cannot be accepted. Onus to prove that the complainant''s claim falls under the ''Exclusion'' clause of the policy is squarely on the opposite party- Insurance Company submission referred to above advanced by Shri Mehra, Advocate about damage to the transformer being caused due to short circuit is repelled thus being without merit. Transformer is a strong, solid enclosed metallic structure harbouring within its coils, etc. Bursting, rending or tearing of the transformer cannot alone be a sign qua non for explosion. There was loud noise, splashing of oil through the vent pipe and its cover got thrown due to pressure as stated by Chandra Prakash, the then Foreman (Elec.) of the Company who was on duty at the relevant time on 6.9.1993. Assuming it not to be a case of explosion, the opposite party-Insurance Company cannot deny the claim it not being covered by aforementioned ''Exclusion'' clause of the policy. Repudiation of liability under the policies is deficiency in service on the part of the Insurance Company.

COMING to the quantum of damages, it is in the cross-examination of T.D. Bahety, Director of complainant-Company, CW-2, that the Company accepts the assessment as made by the surveyors in respect of material damage and loss of profit policy. In the joint survey final report dated 30.7.1997 the Surveyors have recommended payment of Rs. 6,82,433 under the material damage policy. In the final report dated 24.4.1997, the Surveyor has recommended payment of Rs. 41,34,055 under the loss of profit policy. Complainant Company is, thus, entitled to these amounts along with interest which we quantify at 9% p.a. after two months of the two reports dated 30.7.1997 and 24.4.1997. For the foregoing discussion, the complaint is accepted and the opposite party is directed to pay amounts of Rs. 6,82,433 under material damage policy with interest @ 9% p.a. w.e.f. 1.8.1997 and Rs. 41,34,055 with interest at the same rate under loss of profit policy w.e.f. 25.6.1997. Complainant is awarded cost of Rs. 25,000. Complaint allowed.