IMPORTANT POINT
The court determined that the flood was the proximate cause of damage to the stock in cold storage, despite the insurance company's claim of power failure as the cause.

JUDGMENT :

Sathish Ninan, J.

The decree in a suit for damages is under challenge by the defendant-Insurance Company.

2. The plaintiff is a Private Limited Company. It is engaged in the business of processing and exporting of frozen marine products. It has factories at places including one at Veraval in the State of Gujarat. The plaintiff had insured its plant, machinery and cold storage, along with the stock, with the defendants.

3. On 06.08.2007, there occurred incessant rain at Veraval, leading to the opening of a dam, and resultant heavy floods. The Electricity Department switched off the power supply. Since the water level had arisen up to a height of six feet, the generator was submerged and could not be operated. The water started to recede on 08.08.2007. The flood water inundated into the cold storage resulting in damage to the stock. The plant and machinery and the stock in the cold storage were damaged due to the flood.

4. According to the Insurance Company, the policy of insurance, though covers perils due to flood, the damage to the stock in the cold storage was not the direct result of the flood. There could not have been inundation of water into the cold storage. The damage to the stock was a consequence of the power supply being switched off and the resulting fall in temperature in the cold storage. It was a peril which the plaintiff could have opted to insure. However, the plaintiff had not chosen to take such cover. The insurance company repudiated the plaintiff's claim with regard to the stock in the cold storage.

5. The trial court held that the evidence on record suggests inundation of flood water into the cold storage, resulting in damage to the stock. It was also held that, even if damage to the stock was caused due to power failure, the causation of the damage was the flood. Accordingly the suit was decreed.

6. We have heard learned Senior Counsel Sri.George Cherian, on behalf of the appellants- defendants and Sri.John Joseph the learned counsel for the respondent-plaintiff.

7. The points that arise for determination in this appeal are:-

(i) Is the finding of the trial court that, damages to the stock in the cold storage was caused by inundation of flood water, sustainable on the materials?

(ii) Was the trial court right in holding that disconnection of power supply consequent to the flood and the resultant damages to the stock in the cold storage is covered by peril against flood under the insurance policy in question?

(iii) Do the decree and judgment of the trial court warrant any interference?

8. The learned Senior Counsel for the appellants argued that, the finding of the trial court that water had entered the cold storage, does not stand to logic and reasoning. The cold storage is a water-tight and airtight compartment. Hence water cannot enter the chamber from outside. The surveyor did not notice any water marks inside the cold storage. There is no possibility of water having entered through the defrosting pipe as claimed by the plaintiff. If water had entered through the defrosting pipe, then even after the water receded outside, some water would still have been visible in the stock area. Learned Senior Counsel also referred to the various diagrams available in the surveyor's report (Ext.B6), to substantiate that the finding of the trial court that water has entered the cold storage is not correct.

9. The plaintiff is unable to say precisely as to how water entered the cold storage. It is not in dispute that, consequent on the flood, the water level at the place had risen upto six feet. The surveyor as DW1 deposed that when he visited the site most of the water had receded. He deposed “when I entered the building most of the water had gone away, in certain areas one inch of water is still there”. He further deposed that at the time of his visit, water had drained away from the process area and the plant and machinery area. He further deposed that on the day of his visit there was no water in front of the cold s