UNITED INDIA INSURANCE CO. LTD. vs Dipendu Ghosh And Anr.

PETITIONER was the opposite party before the District Forum, where the respondent/complainant had filed a complaint alleging deficiency in service on the part of the petitioner.

BASIC facts of the case leading to filing the complaint are that the respondent/complainant had obtained a special -peril -policy'' for his godown -cum -manufacturing unit for the period from 6.8.2004 to 5.8.2005. It was the case of the respondent/complainant that during the life of the policy, the godown -cum -manufacturing unit of the respondent was badly affected during the rainy season of September and October, 2004, on account of which the respondent suffered a loss of Rs. 3,40,000. A claim was lodged with the petitioner, who appointed a Surveyor, who after visit to the site assessed the loss at Rs. 1,76,299. He also mentioned in his report that the flood did come into area, but it did not enter into the factory or into the godown premises of the insured. However, there was moisture in view of water logging, resulting in affecting the bamboo chips and resulting in the loss, assessed by the Surveyor. When in these circumstances, the claim of the respondent/complainant was repudiated, a complaint was filed before the District Forum, who after perusal of material on record, directed the petitioner to pay a sum of Rs. 2 lakh to the respondent/complainant within a period of 2 months, failing which it was to carry interest @ 12% from the date of filing the complaint till the date of realisation.

AGGRIEVED by this order, an appeal was filed before the State Commission, which was partly allowed and the quantum of compensation awarded by the District Forum was modified to read as Rs. 1,75,000. Aggrieved/not satisfied with this relief, the petitioner Insurance Company has filed the present revision petition before us. We heard the learned Counsel for the parties. Learned Counsel for the petitioner relied upon the terms of the policy, report of the surveyor as well as the condition appearing at Sl. VI of standard fire and special peril policy, which reads as follows: "VI. Storm, Cyclone, Typhoon, Tempest, Hurricane Tornado, Flood and Inundation -Loss destruction or damage directly caused by storm, cyclone, typhoon, tempest, hurricane, tornado, flood or inundation excluding those resulting from earthquake, volcanic eruption or other convulsions of nature. (Wherever earthquake cover is given as an add on cover, the word excluding those resulting from earthquake, volcanic eruption or other convulsions of nature shall stand deleted)." (Emphasis supplied)

THE NOTES ON ASSESSMENT of the surveyor''s report reads as under: "Notes on Assessment - (a) About the incident -as per our spot verification and Insured''s declaration, it appeared that Insured suffered loss from the indirect impact of flood water. According to the policy condition, we can say that any loss, destruction or damage directly caused by storm, cyclone, typhoon, tempest, flood or inundation is covered by policy. Here there is no direct impact of flood or inundated water on the materials. As such coverage of policy condition was doubtful.

(b) After discussion with another produces namely Krishna Kunja'' in the same locality it appears that stock belongs to the last stage, i.e. after bending, material should be kept into dry and save place. But here, insured kept the material into inferior quality class one godown with unscientific preservation pattern of storing. This situation might be made a scope to the contact of materials with the moisture. This represents an impression about the negligence of insured. The insured reportedly confirmed us though there was a flood in that area but which was not directly affected his godown or stock. The flood water reached near to the factory premises and it was not entered into the factory. So the loss is due to high density moisture grown up during the situation of flood which perhaps affected the semi -finished umbrella sticks as stated by the insured. So, considering the all above aspects and statement of the Insured we conclude that the proximate cause of loss is due to the moisture, it was an indirect impact of act of God perils, which is not covered by the policy conditions of fire and special peril policy. Hence, Insurer''s liability became nil."

IT is the case of the petitioner that as per report of the Surveyor, the loss was not caused directly'' by storm cyclone...flood and inundation''; As per the report of the Surveyor, the flood water never entered the premises of the insured; loss, if any, was caused by moisture from the inundation area, which is not covered by the perils covered.

IN our view, the outcome of the revision petition would depend on the appreciation of the word directly'' appearing in the conditions of the Policy (relevant extract already reproduced earlier).

LEARNED Counsel for the respondent brought on record the copy of P. Ramanatha Aiyar''s The Law Lexicon, Law Dictionary''. As per this dictionary, the word direct cause'' as well as Direct and proximate cause'' has been defined as under: "Direct cause -that which sets in motion train of events which brings about result without intervention of any force operating or working actively from new and independent source; or, one without which the injury would not have happened. Norbeck v. Mutual of Omaha Ins. Co., 3 Wash. App 582, 476 p 2d. 546, 547 (Black''s Law Dictionary) Direct and Proximate Cause'' means the cause which naturally leads to and might have been expected to be directly instrumental in producing the result complained of."

(Emphasis supplied)

NOTHING to the contrary has been brought on record by the learned Counsel for the petitioner.

IN view of the meaning of Direct cause'' and Direct and proximate cause'' reproduced above, we have no hesitation in accepting the fact that in the present case, unquestionably, the loss was caused from direct and proximate cause of inundation, thus making it fall within the terms of the policy covering the risk against special perils.

IN the light of this, we find no merit in this revision petition, hence dismissed.

NO order as to costs. R.P. dismissed.