The accident clause in an insurance policy covering a cold storage plant includes loss of stock due to failure of electricity supply, where the rise in temperature in the refrigeration chambers is caused by an accident to the plant and machinery.

Mr. Justice Suhas C. Sen, President— M/s. Vivek Cold Storage (P) Limited, 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.

2. 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.

3. According to the complainant an accident took place on 25.9.1990 as a result of which potatoes stored in the godown were damaged. The dispute centres around the effect of the accident, which we shall examine later in the judgment.

4. 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.

5.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.

6. 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.

7.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.

8. 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 Po