IMPORTANT POINT
When the insured is at fault in maintaining the cold storage properly, insurance company cannot be made liable to pay compensation for the loss caused to the insured.

C. Viswanath, Member—Brief facts of the case are as follows:-

M/s. Shivram Chandra Jagarnath is a registered partnership firm, with Mr. Surendra Singh as the Managing Partner. Shivram Chandra Jagarnath Cold Storage has a total capacity of 53989.40 quintals of potatoes. In 2008, Opposite Party No. 1, the New India Assurance Company has issued two assurance policies, Policy No. 420705/44/08/54/30000002 for deterioration of stock of potato policy from 04.04.2008 till 03.11.2008 (in short hereinafter referred to as ‘DOS’) and another Policy No. 420705/44/08/30000001, Machine Break Down policy from 03.04.2008 to 04.04.2009 (in short hereinafter referred to as “MBD”) to the Complainant.

On 13.10.2008, the Complainant requested the OP Insurance Company for inspection of the stock of potatoes insured with them as rot and sprouting was noticed in about 30,000 quintal of potatoes. On 10.11.2008, the Complainant forwarded bills and quotations of Rs.46,921.50/- to the OP Insurance Company for payment under the MBD Policy towards breakdown of compressors. On 30.12.2008, the OP Insurance Company paid an amount of Rs.28,128/- to the Complainant towards the settlement of claim under the Machinery Breakdown Policy for breakdown/repair of machinery installed in the cold storage. The Complainant after assessing the actual loss caused to the stock of potatoes in the cold storage, lodged a claim of Rs.1,35,63,144.65/- for the loss of 24,660.263 quintals of potato under the DOS policy with the OP Insurance Company.

The learned counsel for the Complainant contended that the OP Insurer failed to appreciate that the temperature recorded in the log-sheet was lower than the actual temperature. It is submitted that for most of the year, the cold storage was running properly. However, in the month of September and October, 2008 (more particularly on 19.9.08, 5.10.08, 9.10.08) the 100 HP motors, KC4 Cylinder compressor and exhaust fans stopped working and got defective, leading to increase in temperature inside the cooling chambers, which was not correctly recorded by the staff maintaining the temperature log-sheet. The said staff was immediately removed from the services of the cold storage. The defects of the aforesaid machinery were rectified at the earliest and the same was also duly informed to the OP Insurer. The reimbursement of the cost incurred by the Complainants towards repair of such machinery was claimed and the claim was settled by the OP Insurer under the MBD Policy.

Er. Anil K. Pandey, Surveyor, Loss Assessor was appointed to carry out inspection of stock of potatoes. He submitted his preliminary report on 16.10.08. However, the OP Insurer failed to take into consideration the survey report. The Surveyor has opined that the damage to stock was due to deficiency of the cooling system of CH-II.

The Surveyor, Mr. M.S. Khamesra in his Survey Report has admitted the loss of 24660.263 Qtls. of potato due to sprouting and rotting and assessed the loss of potato to the tune of Rs.98,64,105/-. The Surveyor in his report has also recorded that :-

“a. In my opinion the sprouting could have taken place only due to higher humidity & temperature in the chamber...there seems to be no other cause for sprouting.

b. Against a licensed capacity of 53989.4 qtls 53454.15 Qtls of potato were loaded.

c. Turning of bags was carried out between 21.5 & 28.5, 25.6 & 15.7 in chamber no. 1 & between 29.5 & 22.6, 16.7 & 8.8.2008 in chamber no. 2. – as informed”

Once the cause of loss has been attributed by the Surveyor to higher temperature, merely because the staff has wrongly noted the readings in the log-sheet, does not entitle the Surveyor and OP Insurer to repudiate the claim of the Complainants on frivolous ground.

The OP Insurer failed to appreciate that the pre-assurance survey mentions that the building, plant & machinery were properly maintained and were in good shape. Further, it is a well-known fact that the only reason for sprouting and rotting of potato is