Oriental Insurance Co. Ltd. vs MODERN INSULATORS LTD.

APPELLANT was the opposite party before the State Commission, where the respondent M/s. Modern Insulators Ltd. had filed a complaint alleging deficiency in service on the part of the appellant Oriental Insurance Company Ltd.

VERY briefly the facts of the case are that the respondent/complainant had obtained a ''Marine-cum-Erection Policy with regard to installation of 73 M3 kiln with furniture for an amount of Rs. 7,23,00,000 and Rs. 1,00,000 for third party risk. The Policy covered risk during transit, storage, erection, trial and testing period. It was the case of the complainant that when the kiln M3 was loaded on 9.9.1986 with insulators for trial and testing and when after fire cycle and cooling, the kiln door was opened, two cars were found collapsed, resulting into furniture losses. The matter was reported to the appellant who appointed a surveyor who went to the spot and assessed the loss sustained at Rs. 1,32,517.76, yet this claim was not getting settled, hence a complaint was filed before the State Commission. The complaint was resisted by the appellant/opposite party. After hearing the parties and keeping in view the provisions of the Policy, the complaint was allowed and the appellant was directed to pay Rs. 1,32,517.76 along with interest @12% p.a. from 17.9.1986 till the date of payment along with cost of Rs. 10,000. Aggrieved by this order, this appeal has been filed before us.

We heard the learned Counsel for the parties and perused the material on record. The learned Counsel for the appellant wishes to rely upon the sub-para (g) of the exclusion clause which reads as under: "(g) any damage or penalties on account of the insured''s non-fulfilment of the terms of delivery or completion under his contract of erection or of any obligation assumed thereunder including consequential loss of any kind or description or for any aesthetic defects or operational deficiencies."

IT was his contention that, as rightly held by them, that the loss was during the ''operation'' of the machine and not during the ''trial'' period. After hearing the learned Counsel for the parties and perusing the material on record, we find that there cannot be any dispute that initially the policy was issued on 14.2.1985 covering the risk of plant and machinery packed in wooden cases, crates and/or bulk machinery and any other customary packing. This covered the risk period from 10.4.1986 to 9.5.1986 for transit purposes. From 12.5.1985 to 11.6.1986 the policy covered the risk, for storage-cum-erection including trial and testing and thereafter was extended for 3 months from 12.6.1986 to 11.9.1986 and subsequently was further extended for a period of 6 months including four weeks'' trial and testing from 11.9.1986 to 10.3.1987. In the endorsement, it was clearly mentioned, "At the request of the insured, it is hereby agreed and declared that the period for the storage-cum-erection risk is within mentioned policy has been extended for six months including four weeks trial and testing period, i.e., from 11.9.1986 to 10.3.1987 on a sum insured Rs. 2,94,000 only." (Emphasis supplied)

ON the basis of this it can be stated that between period 11.8.1986 and 10.3.1987 the risk which was covered was relatable to ''trial and testing'' along with other items. It is not in dispute that it was on 17.9.1986 that the loss occurred for which the claim was preferred. The endorsement clearly states the word ''trial and testing'', and the period indicated is 11.9.1986 to 10.3.1987. Since loss which occurred on 17.9.1986 falls within the period coverage as also during the period of ''trial'' and "testing'' which was reflected in the endorsement referred above, it cannot be inferred to state that the loss occurred during the ''operation'' period or it was on account of any ''operational'' deficiency. There is nothing brought on record in support of its later contention. In the aforementioned circumstances, we are left no option but to infer that the loss occurred during the trial and testing period and it was within the period covered by the policy. In these circumstances, we find no merit in the plea advanced by the learned Counsel for the appellant. This Appeal has no merit, hence dismissed.

NO order as to costs. Appeal dismissed.