NEW INDIA ASSURANCE COMPANY LIMITED vs VIVEK COLD STORAGE (P) LTD.

M/s. Vivek Cold Storage (P) Ltd., complainant lodged a complaint before Consumer Disputes Redressal Forum, Calcutta. It is a Company engaged in running cold storage business at Jangipara, District Hugli. Potatoes are stored in the cold storage of the Company.

THE Company had taken various insurance policies from the New India Assurance Company Limited, the appellant herein. THEse policies covered fire risk as well as other risks to buildings, machinery etc. and also deterioration of stock of potatoes. For these risks Rs. 13,655/-, Rs. 14,224/-, Rs. 19,148/- and Rs. 18,215/- were paid as insurance premium. It is the case of the complainant that over and above the normal premium rates, the complainant had to pay for extra benefits like protection against failure of electricity supply. THE complainant had not lodged any complaint for the years 1984- 85 to 1989-90 even though large premiums were paid. THE dispute in this case relates to the period of 2.5.1990 to 1.5.1991 which was covered by an insurance policy issued by the appellant Insurance Company. THE cover was to the extent of Rs. 75,89,435/- for which premium of Rs. 1,09,286/- was paid. According to the complainant an accident took place on 25.9.1990 as a result of which potatoes stored in the godown was damaged. The dispute centres around the effect of the accident, which we shall examine later in the judgment.

On the basis of a claim lodged by the complainant the Insurance Company appointed a Surveyor. The Surveyor submitted his report on 18.12.1991. The grievance of the complainant is that a copy of this report was not given to the complainant. The complainant being unhappy with the report of the Surveyor lodged the present complaint. One of the points taken by the Insurance Company, before the State Commission, was that the complaint was barred by limitation. It was argued that the cause of damage to the potatoes was accident (leakage of gas). This is an event over which the Insurance Company had not provided any cover. The second point is whether the refusal of the Insurance Company to pay for the loss of potatoes kept in the cold storage will constitute deficiency in service even when such loss was due to failure of electricity supply by the State Electricity Board.

SO far as the point of limitation is concerned the alleged accident took place on 25.9.1990 and this complaint was lodged under Section 12 of the Consumer Protection Act, 1980 on 22nd July, 1994. The case of the complainant is that the delay should be computed after taking into consideration the negotiations that took place between the complainant and the Insurance Company before the claim was finally repudiated. It is true that the period of limitation cannot be extended merely by writing letters to the Insurance Company, after the claim was repudiated. However, this point of limitation was taken before the State Commission. The State Commission had condoned the delay after taking into account all the facts and circumstances of the case. The decision of the State Commission is not shown to be perverse in any way. We are of the view there is no ground for interfering with the discretionary order passed by the State Commission.

ON the second point it has been strenuously argued by Mr. P.K. Seth, Counsel for the petitioner, that the accident clause covers only breakdown of machinery of the cold storage due to unforeseen circumstances. But, in this case what has happened is that due to interrupted supply of electricity the appellant suffered loss and damage because the entire stock of potatoes in the cold storage deteriorated. Mr. Seth drew our attention to the word ''accident'' as defined in the policy, which is as under : "The term "Accident" shall mean and be limited to- ''Accident'''' (a) Any sudden or unforeseen loss or damage to the Plant and Machinery. Described in Schedule I of the Policy due to an accidental cause covered by the Machinery Insurance Policy specified in Schedule 1 and not herein after excluded. Exclusion : (i) Failure of any part(s) requiring periodical renewal (such as failure of belts, gaskets, packing material, joints of any kind and insulation). (ii) Operation of fuses and kindred devices. (b) Escape of Refrigerant in the Chamber as a direct result of damage to the Plant and Machinery described in Schedule I for which damage a claim is admissible under the Machinery Insurance Policy specified in the Schedule I."

Under the policy the Insurance Company had agreed with the insured that at any time during the period of insurance stated in Schedule II or during any subsequent period for which the insured pays and the Company may accept the premium for renewal of the policy, the Company will indemnify the insured in the manner and to the extent hereinafter provided for damage to the stocks described in Schedule II by contamination and/or deterioration, put- refaction as a result of rise in temperature in the Refrigeration Chambers caused by any loss of or damage due to an accident, as defined hereafter to the Plant and Machinery specified in Schedule I and under the Machinery Insurance Policy in force.

THE insurance cover was for, inter alia, damage to the stocks. THE damage may have been caused by contamination and/or deterioration, putrefaction as a result of rise in the temperature in the refrigerator chambers. This rise in temperature has to be caused by an accident to the plant and machinery specified in Schedule I of the policy. THE contention on behalf of the Insurance Company is that if the rise in the temperature takes place for any reason other than what has been specified in the terms of the policy, the Insurance Company should not be held liable to compensate the insured. If uninterrupted supply of electricity does not take place, the firm may have to close down its business. But, it will not be a case of ''accident'' to the plant and machinery.

WE have carefully considered the arguments of both sides. WE are of the view that in the facts of the case the revision petition will have to be dismissed. The complainant had taken up the policy long ago and had paid extra premiums for the years 1988,1989,1990 and 1991 to get his stock of potatoes fully covered by the insurance policy. According to the assessee an accident occurred on 25.9.1990 as a result of which he suffered a loss of Rs. 2,38,147.45 ps., as a result of damage caused to the potatoes kept in the cold storage. A Surveyor was appointed. He examined the stock of potatoes kept in the cold storage and came to the conclusion that the potatoes were damaged. There is no dispute on these facts. Now, the only question is that the immediate cause of loss to the potato stock was stated to be leakage of ammonia gas. The operative staff of the cold storage noticed this leakage. They closed the plant and tightened the flange successfully within two hours'' time. Loosening of the nuts and bolts and consequential escape of ammonia gas were occurrences which were not foreseen or anticipated and will come squarely within the term ''accident'' as defined in the policy. The Surveyor has not really given any finding as to how the damage to the potatoes took place. He has not doubted the loss or damage suffered by the stock of potatoes in the godown. In fact, he advised that the potatoes be removed from the godown to save them from further deterioration. But, his conclusion was that there was no breakdown of the plant and machinery. Therefore, the claim made by the insured could not be allowed. We are of the view that if the plant and machinery of a cold storage develop leaks and ammonia gas escapes there is a "breakdown" of the plant leading to stoppage of functioning of the plant. This led to the damage to the stock of potatoes stored in it. This would not have happened if the cold storage functioned properly. The plant had to be shut down for repairing the leak. It is not in dispute that the escape of ammonia resulted in the damage to the stock of the potatoes stored in the cold-storage plant. The loosening of nuts and bolts which led to the escape of the refrigerant was clearly accidental and not premeditated. The Insurance Company is liable under the policy to compensate the insured for the loss suffered. This Revision Petition is dismissed. There will be no order as to costs. Revision Petition dismissed.