Shree Ganesh Metal Industries, a partnership firm, had taken two fire insurance policies from Oriental Insurance - one for Rs 40 lakh and the other for Rs 35 lakh. The policy included special perils and covered the firm's stock of various aluminium products manufactured at its Thane factory. The firm's sister concern, Sanghvi & Sons, also stored its materials in the same godown, for which separate policies had been taken.
The properties of both firms were damaged due to storm and rainwater on August 23 and 24, 1997. A fire had also occurred but its cause was not known, and it was not even reported to the authorities. Ganesh Metals informed the insurance company and a claim was lodged for Rs 23,40,860. A surveyor was appointed by the insurance company who opined that the loss was to the tune of Rs 1,75,052, but had not occurred due to a storm, but on account of damage caused by rainwater. So, the insurance company repudiated the claim, terming it as fraudulent and grossly exaggerated. The sister concern's claim was repudiated for the same reason.
Ganesh Metals complained to the National Consumer Disputes Redressal Commission challenging the repudiation. The firm explained the storm was accompanied by heavy rain. This was reported in various newspapers. The gram panchayat's sarpanch had also certified that the corrugated sheets of the godown roof were blown off due to stormy wind, and heavy rain had damaged the aluminium foils' dross. Five adivasi natives staying near the said godown had also given written declarations that there had been abnormal cyclonic winds and storm. The deputy director-general of meteorology at Mumbai had furnished a weather report confirming the storm. The cyclone was so strong over north Maharashtra that the authorities had sounded a warning at all ports from Dahanu to Raigad for squally weather (sudden violent stormy wind). The weather conditions conformed to the definition of "storm" as defined by the Regional Meteorology Centre. To substantiate the loss, the firm relied on the opinions of two metallurgical experts from Indian Aluminium, who confirmed that certain aluminium products can deteriorate due to rainwater exposure.
The insurance company contested the complaint. It claimed the velocity of the wind was only 35 km an hour, whereas in a storm, the speed exceeds 60 km a hour, so it could not be considered a storm. Such a breeze cannot displace the roofing, and the corrugated sheets might have come off due to faulty fixing or poor repairs of the building. Loss was due to rainwater, which was not covered under the policy. Also, aluminium products cannot get spoilt due to rain water. So, it argued the claim had been rightly repudiated.
The Commission observed that newspaper reports referred to the deluge bringing life to a standstill, but there was no mention of cyclone or storm. The Meteorology Centre had recorded a strong monsoon, with wind velocity of 28 to 32 knots, with gusts of 35 to 40 knots. The Commission concluded that it was a borderline case of a storm. The Commission expressed doubts about the claim lodged as there was no explanation about the fire, and the surveyor had also found certain irregularities in the firm's accounts. So, even though the surveyor's report might not be the last and final word, it might form the basis for settlement of the claim.
Accordingly, by its order of November 2, 2014, delivered by Justice J M Malik for the Bench along with S M Kantikar, the National Commission directed the insurance company to pay Rs 1,75,052 towards loss as assessed by the surveyor. The insurance company also ordered to pay nine per cent interest on this amount from the date of the complaint till payment. In addition, Rs 50,000 was awarded towards compensation and costs to be paid within 30 days, and if delay, this too would carry interest at the same rate.
Thus, if technically there may not be a storm, but storm-like conditions exist, a claim would be payable.
The author is a consumer activist
