Shree Cold Storage Pvt Ltd vs NEW INDIA ASSURANCE CO LTD

THE Complainant company had an insurance policy for Rs. 37,95,000/ - covering the risk of building etc. from the Opposite Party. According to the complainant, on 31.5.1989 an earthquake hit the area and the Complainants cold storage suffered huge losses. The upper wall of one of the units had completely fallen on two sides resulting in the falling of the malva and the entire insulation material of the ricehusk and salvage etc., which resulted in further collapse of various verandahs, walls, roofs and bearing of cracks thereof on a very large scale.

THE Complainant duly reported this loss, but the Opposite Party did not immediately send a surveyor. On 15.6.1989 they informed the Complainant about their deputing M/s. Jain Aswani & Co., Chartered Accountant to survey the spot. The Complainant did his due part for the formalities to claim on the aforesaid losses and lodged a claim of Rs. 9,14,760/ - as detailed under: - (Amount in Rs.) 1. First class brickwork in Super structure in Cement Mortar 1:4 with 3 parts Coarse Sand and one -art Ganges Sand 493 cu m @ 750/ - cu m ,69,750.00. 2. RCC Work in 1:2:4 50 cum @ 950/ - cu m. 75,000.00 3. Reinforcement in RCC Work 60 Qtls @ 950/ - Qtl. 57,000.00

12mm PLASTER in Cement Mortar 1:4 1217 sq m @ 30/ - 36,510.00

DRY Chamber on 1st Floor 502 sq m @ 1000/ - sq m 5,02,000.00 Rs. 10,40,260.00 The Dry Chamber is damaged 75%:hence 25% deduction of item 5 ( -)1,25,000.00 Rs. 9,14,760.00 (Sic) 3. That the aforesaid losses and claims were on the basis of the report dated 6.10.89 issued by the Engineer and Approved Surveyor, Shri J.P. Agarwal, appointed by the Complainant himself (Annexure VI). 4. It appears that the surveyor of the Opposite Party M/s. Aswani Gupta, Chartered Accountant, further appointed M/s. J.N. Dubey & Assoc, in 1990 without any authority. When the Counsel for the Opposite Party appearing before us was asked whether the appointment of M/s. Dubey notified to the Complainant, he was unable to do so. Later on 15.2.1991 the Complainant was called upon to fulfil some more formalitites of furnishing documents etc. which the Complainant complied with, but it is two years now and the claim is still not settled. 5. A legal notice was served on the Opposite Party by the Complainant on 22.3.1991, whereby interest at the rate one and half per cent per month on the insurance claim amount reasonably assessed for the period from 1.1.91 onwards has been called to be paid besides the claim amount. But this too has had no effect 6. The Opposite Party in its written submissions and in the arguments put -forth by their Counsel, have maintained that there was only a mild tremor of earthquake on 31.5.1989, and a storm later, but the building fell down, according to the opposite partys surveyors report, due to defective construction. They laid the onus of proving whether there was an earthquake or not on the party claiming the damages. The Counsel for the Opposite Party Mr. S.K. Paul, referred to the terms and conditions of the policy. But when questioned whether the Insurance Company is not required to inspect the premises before issuing a policy of insurance, covering the risk to a building, he categorically said, it is not required to do so. He said the Insurance Company on good faith accepts whatever the party has come forward to insure. This statement cannot be accepted. Also, the Counsels interpretation of certain clauses in the policy viz. that the excess clauses cannot be accepted. We, however, hold that under the excess clause an amount equivalent to 2.5% of the assessed loss has to be deducted.

THE loss estimated by the surveyors of the Opposite Party was Rs. 7,28,313/ - less salvage value in monetary terms amounting to Rs. 1,48,000/ - and thus in total only Rs. 5,80,313/ - less (policy excess). The amount to be borne by the insured under the excess clause.

AFTER hearing both the parties, we are of the opinion that the Complainant should be paid Rs. 5,65,806/ - (being the balance after deduction under the excess clause) by the Insurance Company. (Under the excess clause two and half per cent has to be deducted). Balance is Rs. 5,65,806/ -. We, therefore, direct that the Opposite Party Insurance Company shall pay to the Complainant the sum of Rs. 5,65,806/ - within two months from today failing which the Insurance Company shall pay interest on the said amount @ 18% per annum till the date of payment

THERE will be no order as to costs. Appeal allowed.