Judicial Analysis Court Copy Headnote Facts Arguments Court observation

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Mrs. M. Shreesha, P.M. and Mr. Anup K. Thakur, Member
M/S. A.R. TRADING COMPANY - Appellant
Versus
ORIENTAL INSURANCE COMPANY LIMITED - Respondent
First Appeal No. 131 of 2011.(Against the Order dated 22/12/2010 in Complaint No. 17 of 2009 of the State Commission Chhattisgarh)
Decided on : 17-06-2016

Advocates Appeared:
Mr. Navin Prakash, Advocate, for the Appellant; Mr. Manish Pratap Singh, Advocate and Mr. Atul Jha, Advocate, for the Respondent

The main legal point established in the judgment is the interpretation of the coverage of loss, destruction, or damage caused by pollution, contamination, natural rain, or moisture under the Standard Fire and Special Perils Policy.

Headnote:
Consumer Protection Act - Insurance Claim - Section 19 - Summary of Acts and Sections: Consumer Protection Act, 1986 (Section 19) - The court discussed the provisions of the Standard Fire and Special Perils Policy and the General Exclusion Clause No. 4, and interpreted the coverage of loss, destruction, or damage caused to the insured property by pollution, contamination, natural rain, or moisture. The court also referred to previous judgments to establish the interpretation of 'direct cause' and the coverage of loss caused by moisture content following heavy rains under the policy.
Fact of the Case:

The Complainant, a proprietor of a trading company, had purchased Tendu Leaves and insured them under a 'Standard Fire and Special Perils Policy'. The leaves were damaged due to excessive rain and moisture, and the Insurance Company repudiated the claim.
Finding of the Court:

The court found that the damage to the Tendu Leaves was caused by excessive rain and moisture, which logically should be covered under the policy, even though it was not explicitly listed as one of the perils. The court also noted that the Insurance Company's repudiation was without substantial basis.
Issues: The main issue was whether the damage caused by excessive rain and moisture to the insured Tendu Leaves was covered under the 'Standard Fire and Special Perils Policy'.
Ratio Decidendi: The court interpreted the policy provisions and previous judgments to establish that the damage caused by moisture content following heavy rains should be covered under the policy. The court also found the Insurance Company's repudiation to be without substantial basis.
Final Decision: The Appeals were allowed in part, and the court directed the Insurance Company to pay 50% of the claimed amounts to the Complainant, along with interest and costs.

ORDER

M. Shreesha, Presiding Member - For the reasons cited in the Affidavit, delay of 64 days in all the Appeals, is condoned.

2. Challenge in this First Appeal under Section 19 of the Consumer Protection Act, 1986 (for short the "Act") by the Complainant, is to order dated 22.12.2010, passed by the State Consumer Disputes Redressal Commission, Chhattisgarh, Raipur (for short the 'State Commission') in Complaint Case Nos. 15 to 18 of 2009. By the impugned order, the State Commission dismissed the Complaint on the ground that there was no deficiency of service on behalf of the Insurance Company in repudiating the claim.

3. Since all the four Appeal Nos. 129 of 2011, 130 of 2011, 131 of 2011 and 132 of 2011 deal with common facts and common cause of action and survey report is also common, all the Appeals, are being disposed of by this common order.

4. The brief facts as set out in the Complaint are that the Complainant is a proprietor of M/s. A.R. Trading Company and his main occupation was to purchase Tendu Leaves, plucked from the forest, from the Government and sell it to Bidi manufacturing Companies. It is stated that during the months of May-June, the leaves are plucked by the tribals from the forest and sold at the scheduled collection centres of the Government. The fourth Opposite Party, i.e. the Forest Department, Sales, had sold the said Tendu Leaves to the Complainant. It is averred that the Complainant had taken 1916.845 standard bags of Tendu Leaves from the Forest Department at lot No. 51-A, Kukanar and the same was kept in the godown of the society, in village Tongpal. It is pleaded that the Complainant had got the said bags of Tendu Leaves insured covering the period from 18.5.2007 till the midnight of 17.5.2008 under 'Standard Fire and Special Perils Policy'.

5. The Complainant averred that after procuring the Tendu Leaves, they are dried, made into bundles and kept in bags safely in the said godowns in the custody of the employees of the fourth Opposite Party. While so, in the month of December, 2007, at the time of selling the Tendu Leaves, the Complainant observed that the leaves had turned black due to natural calamity, on account of excessive rain fall in that area and hence had become unfit for making Bidis. Therefore, the Complainant submitted claim form on 24.12.2007 to the Second Opposite Party which was repudiated by the first and third Opposite Parties vide their letter dated 13.5.2008, on the ground that leaves were contaminated on account of absorption of moisture from the atmosphere, which is not covered under the Policy.

6. It is specifically pleaded by the Complainant that there was an increase in the moisture content of the atmosphere in the area of Jagdalpur during the months of July to October, 2007 due to excessive rainfall. Since the Tendu Leaves are dried, they naturally absorbed the moisture present in the atmosphere and turned black due to excessive moisture content. At the time of issuance of the Policy, the Complainant was assured that if the Tendu Leaves were destroyed by any natural calamity, the Insurance Company would make good the losses. The Complainant averred that the said Tendu Leaves were purchased from the Fourth Opposite Party and as per the agreement executed, the Complainant had to pay the price in four instalments, otherwise the Opposite Party can initiate legal action to recover the said amount. The Complainant also claims 0.04% interest per day due to non-settlement of the claim for such a long period of time and seeks directions to the Insurance Company to pay the claim amounts of Rs. 57 lakhs in CC No. 15 of 2009 in First Appeal No. 129 of 2011; Rs. 87 lakhs in CC No. 16 of 2009 in First Appeal No. 130 of 2011; Rs. 48 lakhs in CC No.17 of 2009 in First Appeal No.131 of 2011 and Rs. 77,00,000/- in CC No. 18 of 2009 in First Appeal No. 132 of 2011 respectively together with interest, compensation and costs.

7. The Opposite Party/Insurance Company filed their written version a

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