JUSTICE V.K. JAIN, PRESIDING MEMBER

                 The complainant company is engaged in the production and supply of sugar in Orissa and had obtained an insurance policy from the opposite party namely United India Insurance Co. Ltd., with respect to the stock of sugar kept in its factory in Bhubaneswar in Orissa.  The case of the complainant is that its factory, godown and molasses tanker were heavily damaged due to super cyclone Phalin, between 12.10.201 to 15.10.2013, damaging sugar worth Rs.3,60,00,000/- besides other properties worth Rs.30,00,000/-.  This is also the case of the complainant that the cyclone was followed by heavy rain for ten days which resulted in further damage to the goods and properties of the complainant.  Consequently, the loss of the complainant increased to Rs.10.01 crore.  Though a surveyor was appointed to inspect the factory and assess the loss to the complainant, the claim was repudiated vide letter dated 31.3.2014 which to the extent it is relevant reads as under:

1. The factory was found in inoperative condition.

2. There were immense growths of plants / shrubs all around the godowns and plant areas.

3. General upkeep and maintenance of the plant were extremely poor and unsatisfactory.

4. There were hardly any movement of finished stocks of white sugar of the last season (2012-2013) as well as that of un-cleared stock for season (2011012)

5. There were no documents / records available at the Mill’s end for verification/notings by the surveyor will regard to the stock / Bin Card/Receipt/Issue, production/process log book, maintenance / up keeping of records.

6. There were no signs of uprooting of GCI roof sheets due to storm / cyclone as alleged in respect of white sugar go down.However, 10/15 holes of miniature nature were found / detected (due to lack of maintenance / aging) on the GCI sheets where there is every possibility of seepage / percolation of rain water inside the go down and accumulation and stagnation of same over a period in absence of regular checking and maintenance, the same got absorbed by the lower layer stacks / stocks by the packaged sugar in bags.

7. Buffers / Guards were found erected near the side entrances of white sugar godown (Entry points protected M.S. Roll Shutters) to obstruct direct entry of the rain water (in the event of heavy and severe rainfall) affecting the stacks/bags directly.However, the main entrance of the white sugar godown is clear /normal for easy stock movement.

8. The bottom layer of sugar stocks in HDPE bags had deteriorated marginally / insignificantly on account of prolonged storage and greater height of packing.

9. Due to prolonged storage, the quality of sugar stocks in jute / gunny bags had deteriorated considerably on account of absorption of moisture because of aging as sugar being hygroscopic in nature and stored for a considerable period of time.The colour of the sugar bags had blackened on the exposed surfaces.The sugar had liquefied and also oozed out from the bottom layers and scattered all around the stacked areas.

In view of the above observations alleged damage or loss is not caused by peril i.e. cyclone covered under the policy issued and accordingly claim is not payable.”

                Being aggrieved from the rejection of the claim, the complainant is before this Commission, seeking payment of Rs.10.01 crores, along with interest and compensation.

2.     The complaint has been resisted by the insurer which has inter-alia pleaded that the claim was thoroughly examined by the insurer but the same was not payable.  It is further stated in the written version that there was no activity in the factory which was lying dormant and the stocks kept in the godown were old and had deteriorated with the passage of time.  It is also alleged that the loss was not attributable to cyclone or the rains.  It is also alleged in the written version that there was no damage to the roof or the godown shed and there was no possibility of any loss as alleged by the complainant.  It is further alleged that the complainant was not able to utilize or dispose of the stock which suffered gradual deterioration over a period of time. 

3.     The report of the surveyor M/s. SNM Consultants to the extent it appears to be relevant reads as under:

        “The Affected Finished Goods / White Sugar Godown is Built of Brick (Cement Plastered), Pucca Floor with Roof of GCI Roof Sheets supported on Iron Purlins.  The Entry Points (4 Nos.) are covered with M.S. Rolling Shutter out of which 2 Nos. are operated whilst the others are closed for Security /Safety Purpose.”

        “The Affected Main Shed/Mill House / Process House are built of Brick Walls, Pucca Floor, Asbestos sheets roofing supported on iron posts and purlins.  The entry points / openings are protected by M.S. Fabricated Doors / Framework”.

        “Occurrence :

        The Insured had alleged that the damages sustained to asbestos roof sheets and other civil structures were caused due to storm / super cyclone on 12^th / 13^th October, 2013 which swept over the various areas of the State of Odisha followed by Torrential Rain which had continued for a considerable period.

        The Insured had also alleged that due to entry of Rainwater through the Openings created by Broken Roof Sheets there have been substantial damages sustained to the stock of packed white sugar in HDPE/Jute Bags in the Finished Stock / White Sugar godown.”

        “Infact there were No signs of uprooting / severe Impact on the GCI Roof sheets in the Finished Goods / white sugar godown due to storm / super cyclone as alleged.  However, around 8 / 9 Holes of Miniature nature on the GCI roof sheets which could only be seen / identified in Broad Day Light”.

        Obviously, these damages to the roof sheets appear to be due to Ageing and not due to Impact of Cyclone as Alleged by the Insured.  Moreover the Insured did not raise any claim for damages to GCI Roof sheets of the white sugar godown.”

        “The damages sustained to the GCI roof sheets of white sugar godown were very Miniature in nature obviously due to aging and lack of regular maintenance / repair.  However, the insured did not raise any claim for the damages to GCI sheets whatsoever.”

        The damages caused to A.C. Roofing sheets / ridges in various sheds of the Mill premises were due to lack of maintenance / upkeepment.

        We would like to place on records that the Insured had initially stated that the loss / damage to stock had been caused due to the Effect of AIR and the Cyclone followed with Heavy & Massive Rain for 10 days causing more Damage to the Sugar due to water Vapour and Moisturization of sugar which are Not Admissible Perils of the Coverage specified in the Policy under reference.”

        “Moreover the loss / damages sustained to GCI/Asbestos roof sheets due to ageing and lack of proper maintenance / upkeepment does not fall within the Insured Perils of the Policy in question.”

        “It may also be noted that the Risk / Sunapal, Badamba and its Neighbouring Areas were not Severely Affected due to super Cyclone on 12^th / 13^th October, 2013 as alleged by the Insured.

        “The Stock of white sugar in Jute / Gunny bags in several stacks were found covered on the Top with Black Polythene sheets.  However, due to prolong storage, the quality had deteriorated considerably on account of absorption of Moisture as sugar being Hygroscopic in nature, for a considerable period of time wherein the colour of the bags had blackened on the exposed surfaces.  The sugar had liquefied and also oozed out from the bottom layers accumulated all around the stacked areas”.

        “In view of the above, it is thus abundantly clear that the alleged loss / damage as claimed by the Insured do not fall within the specified coverage of the policy under reference”.

        The concerned Officials of the Insured took us around the Affected Main Factory Shed / Plant and white sugar godown and other Buildings / Areas and the following observations were made:-

        “(viii) The stock of white sugar in Jute / Gunny bags in several stacks were found covered on the top with black polythene sheets.  However, due to prolong storage, the quality had deteriorated considerably on account of absorption of moisture as sugar being hygroscopic in nature, for a considerable period of time wherein the colour of the bags had blackened on the exposed surfaces.  The sugar had liquefied and also oozed out from the bottom layers scattered all around the stacked areas”.

        “(ix)  There were no signs of uprooting of GCI roof sheets due to storm super cyclone as alleged in respect of the white sugar godown.  However, around 10/15 Holes of Miniature nature were found / detected (due to lack of maintenance/ageing) on the GCI sheets where there is every possibility of seepage / percolation of rainwater inside the godown and accumulation and stagnation of the same over a period, in absence of regular checking and maintenance, the same got absorbed by the Lower Layer Stock / Stack by the Packed Sugar in Bags.”

        “We as a prudent, senior experienced surveyor are of the opinion that the alleged claim as preferred by the Insured, considering the Factors as noted by us and mentioned earlier, does not fall within the ambit of the perils of the policy under reference”.

4.     The insurance policy inter-ala insured the complainant against the following loss or damage:

        “(vi)   Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation: Loss, destruction or damage directly caused by storm, cyclone, typhoon, tempest, hurricane, tornado flood or inundation excluding these resulting from earthquake, volcanic eruption or other convulsions of nature.  (Wherever earthquake cover is given as an ‘add on cover’ the words “excluding those resulting from earthquake volcanic eruption or other convulsions of nature” shall stand deleted”.

5.     The case of the complainant, as stated to the surveyor was that the damages to the Asbestos roof sheets and other civil structures were caused due to storm / super-cyclone.  This was also the case of the complainant before the surveyor that due to entry of rain water through the openings which had been created by broken roof sheets there had been substantial damage to the stock of white sugar kept in the bags.  The surveyor however, found no sign of uprooting / severe impact on the GCI roof sheets due to storm / super-cyclone.  He only found 8-9 miniature holes on the said sheets.  The holes were so small that they could be seen only in broad day light.  The surveyor reported that the damage to the roof sheets were due to aging and want of regular maintenance / repair.  Though, not conclusive, the report of the surveyor is entitled to a great weight and needs to be accepted particularly in a summary jurisdiction, unless the same is shown to be wholly untenable.  Despite the surveyor having rejected the case set out by the complainant before him as regards the cause of damage to the GCI sheets, the complainant has not produced any expert evidence before this Commission to prove that the GCI roof sheets were in fact damaged to cyclone / storm and not on account of aging and lack of maintenance.  The complainant has not even filed the photographs, if any, of the damaged GCI sheets.  The surveyor on the other hand has filed the photographs taken by him which corroborate the cause of damage to the GCI sheets given by him.  I am in agreement with the learned counsel for the insurer that had the GCI roof sheets been damaged by cyclone / storm, the damage would have been extremely severe and would not have been confined to 8-9 miniature holes in the said sheets.  More importantly, the surveyor also noted that Sunapal Badamba and its neighbouring areas were not even severely affected due to super cyclone on
12 / 13.10.2013.  No official record has been produced by the complainant either from Meteorological Department or from any other official source to prove that the goods and properties were severely damaged due to cyclone on 12/13.10.2013, in the locality in which the factory of the complainant is situated.  This is yet another circumstance which belies cause of damage to the GCI sheets propounded by the complainant.

6.     The surveyor also reported that the quality of the sugar had deteriorated due to absorption of moisture on account of prolonged storage of sugar, since there had been no movement of the goods in the factory of the complainant for a considerable time.  As a result the bags containing sugar had got blackened on the exposed surfaces the sugar got liquefied and started oozing out from the bottom layers all around the stacked areas.  Despite the aforesaid report of the finding of the surveyor, no expert evidence has been led by the complainant to prove that the sugar stock in jute / gunny bags had not deteriorated for the above referred reasons given by the surveyor and that the stock of sugar had actually got damaged on account of the water having entered the shed through the openings created by damage to the GIC sheets by storm / cyclone.  According to the surveyor, there was every possibility of seepage, accumulation and stagnation of rain water inside the godown through the miniature holes caused in the GIC sheet due to aging and for want of maintenance.  According to him, this happened in the absence of regular checking and maintenance, the rain water got absorbed by lower layers stock of sugar.   No expert evidence has been led by the complainant to prove that the stock of sugar could not have been damaged in the aforesaid manner.

        The surveyor also noted that initially the complainant had alleged that the loss / damage to the stock was caused due to the effect of air and cyclone, followed by heavy and massive rain for ten days, causing further damage to sugar due to water vapour and moisturization of sugar which were not admissible perils of the coverage. 

7.     For the reasons stated hereinabove, I hold that the complainant has failed to prove that the loss of and / or damage to its properties and stock of sugar happened on account of one of the perils against which its goods and properties had been insured.  The complainant therefore, is not entitled to any reimbursement from the insurer.

8.     The complaint is hereby dismissed with no order as to costs.