Damage Caused Due To Not Maintaining Requisite Temperature In Storage, Insured Not Entitled To Any Relief; NCDRC

Commission observed that any damage to the stocks due to rise or fall in temperature caused by stoppage of any section or sections of refrigeration plan and machinery is a General Exception of Deterioration of Stocks (Potatoes) Insurance Policy.

In this case, the insured was engaged in cold storage business. The Insured obtained Standard Fire and Special Perils Policy, Machinery Insurance Policy, Fire Declaration Policy, and Deterioration of Stocks (Potatoes) Insurance Policy, for a sum of Rs.106764000/- on Potatoes stored in the cold storage, from the Insurer. The potatoes stored in the cold storages were becoming soft and pouch were leaking. The Insured wrote a letter to Assistant Director of Agricultural Marketing, and Divisional Manager (opposite party-2), seeking help for giving opinion in respect of actual cause of softness of potatoes and leakage. When the Insured did not receive any response, then he wrote a letter to Deputy General Manager (opposite party-3). It was found that Indra Deo Sharma, Plant In-charge of the cold storage failed to maintain requisite temperature inside the chambers maliciously, due to which, loss was occurred. The Insured submitted his Claim Form, under Fire Declaration Policy, which was accepted by the Insurer. The surveyor stated that the claim was not admissible in Deterioration of Stocks (Potatoes) Insurance Policy. The Insurer, repudiated the claim of the Insured as it was not admissible in Deterioration of Stocks (Potatoes) Insurance Policy. The Insured made a representation, against repudiation letter and stated that his claim was admissible under Fire Declaration Policy as the loss had occurred due to malicious act of Plant In-charge. The Insured also wrote a letter to Grievance Cell but nothing was done. Aggrieved by the act of insurer the complainant filed an appeal before the National Commission under Section 19 of the Consumer Protection Act, 1986 claiming deficiency in service on the part of Insurer.

Analysis:

The issue for consideration before the National Commission was whether the insurance company is liable for the loss suffered by the insured or not.

Commission found that, the surveyor stated that prima facie, the claim for deterioration of potatoes is not tenable. From Final Survey Report of the surveyor, it is proved that the potatoes were deteriorated due to deposition of ice on cooling coils, which dropped as chilled water over the potato's bags, causing cold injury to the stock. Gradually this water soaking of bags spread inside the floor and rotting spread.

Commission noted that, General Exception clause-ii of Deterioration of Stocks (Potatoes) Insurance Policy provides that any damage to the stocks due to rise or fall in temperature caused by stoppage of any section or sections of refrigeration plan and machinery.

The bench observed that, the damage was caused as the Plant In-charge, had failed to maintain requisite temperature inside the chambers, where potatoes were stored. The claim fell in exception clause as such it was repudiated. The alleged FIR registered by the insured under Section 420/427 IPC against Indra Deo Sharma, Plant In-charge for failing to maintain requisite temperature inside the chambers, do not relate to malicious act. The claim, under Fire Declaration Policy is not tenable. There is no deficiency in service on the part of Insurer.

After carefully looking into Clause-V of Fire Declaration Policy, National Commission stated that malicious damage must be caused directly to the property insured by external violent means. Total or partial cessation of work or the retardation or interruption or cessation of any process or operations or omissions of any kind are exceptions. There is no external violent means which caused the damage. Rather the damage was caused due to not maintaining requisite temperature in the chambers of cold storage, by Plant In-charge, which falls in exception (a) of Clause-V. In view of the aforesaid discussion, the complainant is not entitled to any relief. National Commission dismissed the appeal.

Case Name: M/S. Shyamali Cold Storage Pvt. Ltd. & Anr. v. New India Assurance Co. Ltd. & 4 Ors.

Case No.: CONSUMER CASE NO. 255 OF 2015

Corum: Justice Ram Surat Ram Maurya, Presiding Member

Decided on: 01^st June, 2022

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