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PUNJAB STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, CHANDIGARH
Hon’ble Mr. Justice S.S. Dewan, President; Smt. Laxmi Kanta Chawla, Member
M/S. SHIVALIK FERTILIZER LIMITED—Complainant
versus
UNITED INDIA INSURANCE COMPANY & ANOTHER—O.P.
Complaint No. 4 of 1992 — Decided on 15.7.1992.
Counsel for the Parties:
For the Complainant:Mr. R.L. Sharma, Advocate.
For the O.P.:Mr. O.P. Gupta, Advocate.
An insurance company is not liable to indemnify the insured for the loss of goods due to floods, if the fire policy obtained by the insured excludes any loss or damage to the goods due to floods.
Headnote:
CONSUMER PROTECTION ACT, 1986 - SECTION 12, 17(A)(I) - INSURANCE POLICY - EXCLUSION CLAUSE - FLOOD DAMAGE - LIABILITY OF INSURANCE COMPANY: The insurance company is not liable to indemnify the insured for the loss of goods due to floods, as the fire policy obtained by the insured excluded any loss or damage to the goods due to floods.
Fact of the Case:
The complainant, a fertilizer manufacturing company, insured its stocks of fertilizers stored in godowns with the insurance company under a fire policy. The stocks were damaged due to extensive floods. The insurance company rejected the claim on the ground that the loss was not covered by the fire policy as it excluded any loss or damage due to floods.
Finding of the Court:
The court held that the insurance company was not liable to indemnify the insured for the loss of goods due to floods, as the fire policy obtained by the insured excluded any loss or damage to the goods due to floods.
Issues: Whether the insurance company is liable to indemnify the insured for the loss of goods due to floods, despite the exclusion clause in the fire policy.
Ratio Decidendi: The court interpreted the exclusion clause (h)(ii) of the fire policy, which excluded any loss or damage occasioned by or through or in consequence directly or indirectly, of any of the following occurrences, namely, Typhoon, Hurricane, Tornado, Cyclone, or other atmospheric disturbance. Flood and Inundation.
Final Decision: The court dismissed the complaint filed by the insured against the insurance company.
Mr. Justice S.S. Dewan, President — M/s. Shivalik Fertilizer Limited. Chandigarh (Complainant) has filed this complain! on 14th January, 1992 under Section 12 read with Section 17(a)(i) of the Consumer Protection Act, 1986 (for short ‘the Act’) against the opposite parties, which will for the sake of brevity hereinafter to be referred as ‘the Insurance Company’, praying that a sum of Rs. 5,93,352/- may be awarded to it together with interest at the rate of 24% p.a. with effect from 28th September, 1988 till the date of realization.
2. The broad outline of the complaint is that the M/s. Shivalik Fertilizer Limited is carrying on the business of manufacturing fertilizers (SSP) and allied products. The firm through the Bank of Baroda, Chandigarh, had insured its stocks of fertilizers stored in godowns Nos. 1 and 2 of Sardar Cold Storage, G.T. Road, Ludhiana, with the Insurance Company on 8.2.1988 for one year under a fire policy ‘C’ (Annexure R1) upto a sum of Rs. 40 lakhs. According to the complainant, in the last week of September, 1988, the stocks stored at the aforesaid godowns at Ludhiana were lost or damaged due to extensive floods. Admittedly, the said fire policy excluded from its scope any loss or damage to the goods due to the floods. The complainant alleges that the Insurance Company was informed “about this incident and on its request, the surveyors M/s. Mehta and Padamsey Pvt. Ltd. were appointed and they assessed the loss at Rs. 5,93352/-. However, its claim was rejected by the Insurance Company vide Annexure C7 dated 10.8.1990 on the ground that the alleged loss of the fertilizer had occasioned due to floods, and, therefore, the Insurance Company was not liable to indemnify the loss suffered by the insured. The present complaint was preferred by the complainant before this Commission on 14.1.1992 and in support of its case the complainant filed 8 documents.
3. In the counters filed by the Insurance Company, five preliminary objections were raised denying the liability to pay any amount to the complainant-insured. It was stated that the damage to the stocks of fertilizers had occasioned due to floods and it was not covered by the fire policy obtained by the complainant. It was also stated that the Insurance Company got the claim of the’ complainant thoroughly examined and obtained experts’ opinion and on the basis of the same, came to the conclusion that the alleged loss was not due to fire and did not fall within the purview of the policy and the same was repudiated. In support of the version of the case, the fire policy ‘C’ (Annexure R1) and the survey report of M/s. Mehta and Padamsey Private Limited (Annexure R2) dated 23.6.1989 were submitted.
4. The complainant has submitted a letter dated 10.8.1990 (Annexure C7) addressed to the complainant. It was signed by the Branch Manager of the Insurance Company. It will be useful to read it in extenso:-
“Please refer to our letter dated October 6, 1988 wherein on referring to the policy, it was intimated to you that the flood risk had not been obtained by you. The company has reexamined the matter very carefully and minutely and it is observed from the policy that you had obtained only a fire policy and the flood risk was never covered and no premium whatsoever for flood risk has been paid by you nor the same has been charged by the company. As the damage to your goods has been caused by flood, therefore, the same does not come under the ambit of the policy issued by the company. As such, the claim preferred by you is being treated as ‘no claim’ and the company is not liable for any loss.”
5. Learned Counsel for the Insurance Company has contended that the Insurance Co. has considered the claim of the complainant in all aspects and only thereafter it has been rejected, and hence there is no deficiency of service. If the complainant is not satisfied with the rejection of the claim, it is open to it to file a suit in a competent Court of civil jurisdiction, but cannot se
