M/S Ruchira Papers Limited, through Shri Sushil Kumar Sharma Employee of the concern, Trilokpur Road, Kalaamb, District Sirmour, H.P.



… Complainant



Versus



National Insurance Company Limited, through the Branch Manager of its Yamunanagar Branch, District Yamunanagar (Haryana).



…Opposite Party

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O R D E R:



Pritam Singh (District Judge) President:- This order shall dispose of complaint filed under section 12 of the Consumer Protection Act, 1986. It is alleged that the complainant is a company and carries its business of manufacturing of kraft paper in its factory at Kala Amb-Trilokpur Road. That the complainant-company insured the building of the factory, plant and machinery installed and fitted with accessories along with electric fittings with the OP-Company vide insurance cover notes Annexures P-2, P-3 & P-4 bearing No.20973, 22463, 22162 dated 07.05.2004 and 28.01.2004 on payment of huge premium. That on the intervening night of 27/28th November, 2004 at about 3 a.m., explosion took place in the rags digester causing extensive damage to the building. That the factum of incident was reported to Police P.S. Sadar Nahan and to the OP-Company, and thereafter, the complainant-company lodged the insurance claim with the OP-Company. But, the OP-Company instead of settling the insurance claim, rejected the same being no claim and conveyed vide letter dated 01.08.2005. Hence, feeling dissatisfied and aggrieved by the act of the OP-Company, the complainant perforce filed this complaint against the OP-Company.



2. The complaint is resisted by OP-Company who while filing reply took some preliminary objections regarding maintainability of the complaint and jurisdiction etc. On merits, it is alleged that the incident occurred due to mechanical failure of LID Lock of the digester and that no explosion took place as alleged. That the matter was got investigated from the surveyor who reported that the incident occurred due to the mechanical failure of lid lock of digester. As such the OP-Company was well within its right to repudiate the claim of the complainant, and there being no deficiency in service, the complaint is sought to be dismissed. Thereafter the parties led evidence in support of their respective pleas.



3. We have heard the learned counsel for the parties at length and have also thoroughly scanned the entire record of the complaint.



4. Admittedly, the building of the factory of complainant-concern along with plant, machinery installed and fitted in it with accessories etc. was duly insured with the OP-Company through different insurance cover notes Annexure P-2 to P-4 w.e.f. 28.01.2004 to 27.01.2005 against payment of huge premium. It is the case of the complainant-concern that on the intervening night of 27/28th November, 2004, the explosion took place in the rags digester which caused extensive damages to the building of the factory of complainant-concern and the workers who were on duty at the relevant time also sustained injuries. That insurance claim so preferred by them with the OP-Company, was repudiated by OP-Company on frivolous and flimsy grounds.



5. Whereas, according to the OP-Company the incident occurred due to the mechanical failure of LID Lock of digester and no explosion took place as alleged by the complainant-concern. That no worker working in the factory at the relevant time sustained injuries and it being a case of no claim, the insurance claim preferred by the complainant-concern was rightly repudiated by them.



6. In support of their plea the OP-Company has relied upon letter Annexure R-1 issued by the complainant-concern to the OP-Company reporting occurrence and cause of occurrence wherein it has been written that the incident took place due to mechanical failure of Lid Lock of the digester. This letter is issued under the signatures of the Executive Director of complainant-concern namely Shri J.N. Singh. On the basis of this letter, they concluded that this incident occurred due to mechanical failure of the Lid lock of the digester. However, the complainant –concern has filed affidavit of Shri J.N. Singh, Executive Director dated 13.07.2004 who clearly stated through this affidavit that he is not a technical person and has no knowledge about technical terms. That he was told that all of a sudden the digester burst from upper side causing damage to roof of the factory and injuring the workers working at the site of the incident, and as such he made report to the OP-Company through this letter Annexure R-1. He has further testified in this affidavit that subsequently he came to know that in fact explosion had taken place in the rags digester which caused extensive damages to the building and injuring the workers present at the site.



7. The complainant-concern has also filed the affidavit of Shri Bhowal Parsad who disclosed in this affidavit that he is working as Digester Operator in complainant-factory stating that on the date of incident, he was on duty in the digester and as such after putting the raw material in the digester, he fixed the lid over the same which was packed tightly as per system and there has not been any lapse in putting the lid on the digester. He further testified that at about 3 AM on the intervening night of 27th/28th November, 2004, he heard the loud voice of explosion at the place of rag digester and when he reached there he saw the steam all around damaging the roof of the building, in which the digester was installed and causing injuries to the workers due to the falling of the boiling material on them. He clearly testified that this explosion was not on account of any mechanical defect in digester.




8. In addition to the affidavits of the aforesaid persons, the complainant-concern has relied upon the affidavits of S’Shri Surender and Roshan Lal who were working as labourers in the complainant-factory at the time of the occurrence who also sustained injuries in this incident. They clearly stated that the explosion took place due to bursting of the rags digester all of a sudden causing extensive damage to the factory building and injuring the workers working in the factory. Beside, the complainant-concern also filed the affidavit of Shri Sushil Kumar, Accountant of the complainant-concern under whose signatures this complaint has been filed. He also testified in his affidavit that this explosion in the rags digester took place all of a sudden that adding that this occurrence did not take place due to mechanical failure of the lid lock of the digester.



9. The aforesaid over whelming cogent oral evidence led on record by the complainant-concern clearly goes to prove that this explosion in the rags digester took place suddenly and there was no mechanical failure of the lid lock of the digester. It may be stated that no cogent oral evidence has been led on record by the OP-Company to rebut the cogent oral evidence of complainant-concern. Even, no affidavit of the surveyor who subsequently assessed the loss after conducting the survey and submitted report filed by the OP-Company. Therefore, from the aforesaid unrebutted overwhelming oral evidence led on record by the complainant-concern, it stands established on record that this explosion took place in the rags digester suddenly causing damages to factory building of complainant-concern and there was no mechanical failure of the lid lock of digester as alleged.




10. As regards the loss sustained by the complainant-concern due to this explosion, it may be stated that the complainant-concern has placed on record the detail of estimates for repairs and measurements and detailed estimate cost Annexure P-9 to P-11. As per claim bill Annexure P-11, the cost of the digester is shown Rs.8.00 lacs and after deducting salvage of Rs.1.50 lacs, the net damage claimed for loss of this digester is shown to the tune of Rs.6.50 lacs. The complainant-concern has claimed damages to the tune of Rs.5,05,452/- caused to their building due to the explosion of rags digester. As per the detail of estimate for repair of digester Annexure P-9 the loss caused to the building of the complainant-concern is shown Rs.4,21,210/- and after adding 20% increase in price of total cost to the tune of Rs.84,242/-, the total loss caused to the building of the complainant-concern is shown Rs.05,05,452/-.



11. In this connection, it may be stated that surveyor and loss assessor Protech Engineers vide report Annexure R-2 dated 26.07.2005 has also shown the cost of the digester to the tune of Rs.8.00 lacs. But, he has shown the loss caused to the building to the tune of Rs.1,45,878.10, but no material has been placed on record by OP-Company along with this report to show as to how the surveyor came to this conclusion that the loss caused to the building of the complainant-concern worked out to Rs.1,45,878.10. He after deducting deprecation @ 50% & 25% respectively on total loss of Rs.9,45,878.10, the net loss is shown to the tune of Rs.05,09,408.58 and after deducting salvage value of Rs.1.50 lacs, the net loss is shown as Rs.3,59,408.58 and after deducting excess clause amount to the tune of Rs.10,000/-, net loss assessed and reported by the surveyor is shown to the tune of Rs.3,49,408.58 to be paid by the OP-Company to the complainant-concern. But, it is not understood as to how the surveyor has deducted deprecation cost @ of 50% and 25% respectively while assessing the loss caused to the building, plant and machinery of the complaint-company. But this fact remained undisputed that the value of the rags digester which burst due to explosion is Rs.8.00 lacs. As stated above, the complainant-concern has also shown the net loss caused to the building at Rs.4,21,210/- as per Annexure P-9. Therefore, in these circumstances, we hold that the complainant-concern is entitled to be indemnified by the OP-Company for the loss of rags digester the value of which is shown at Rs.8.00 lacs plus the loss caused to the building of the complainant-concern to the tune of Rs.4,21,210/- and after deducting salvage to the tune of Rs.1.50 lacs and amount of excess clause to the tune of Rs.10,000/-thereby the complainant-concern is entitled to be indemnified by the OP-Company the net loss to the extent of Rs.10,61,210/-.



12. For the foregoing reasons, we allow this complaint and direct the OP-Company to indemnify the complainant-concern to the extent of Rs.10,61,210/- along with interest at the rate of 9% per annum from the date of filing of the complaint, which is filed on 08.12.2005, till making full payment of aforesaid amount. In addition to this, the OP-Company shall also pay Rs.3,000/- as costs of litigation to the complainant-concern. This order shall be complied with by the OP-Company within a period of forty five days after the date of receipt of copy of this order.