IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED 17.03.2017 CORAM THE HONOURABLE Mr. JUSTICE P.KALAIYARASAN C.S.No.759 of 2006 M/s.Utkal Steels Ltd., Rep. by its authorised agent and Power of Attorney KBD Vara Prasad Having its registered office at Uditnagar, Rourekela 769012 and having its Administrative Office at Old No.143, New No.122, St. Mary's Road, Alwarpet, Chennai-18. ... Plaintiff Vs
1. M/s.Bajaj Allianz General Insurance Co. Ltd., Rep. by its Managing Director Having its registered & Head office at GE Plaza, Airport Road, Yerwada, Pune 411 006.
2. M/s.Bajaj Allianz General Insurance Co. Ltd., Having its regional office at 952-954, Ground Floor, Appasaheb Marathe Marg, Besides Marathe Udyog Bhavan, Prabhadevi, Mumbai 400 025.
3. M/s.Bajaj Allianz General Insurance Co. Ltd., Having its office at Prince Towers, 4th Floor 25/26, College Road, Nungambakkam, Chennai-6. ... Defendants Plaint filed under Order VII Rule 1 of C.P.C. and under Order IV Rule 1 of O.S.Rules praying to pass a judgment and decree in favour of the plaintiff and as against the defendants :
i] directing the defendants to pay a sum of Rs.2,90,79,820/- together with interest at the rate of 12% p.a. from the date of claim till the date of payment ; and
ii] pay the cost of the suit.
For Plaintiff : Mr.S.R.Sundar For Defendants : No representation J U D G M E N T This suit has been filed for recovery of a sum of Rs.2,90,79,820/- together with interest at the rate of 12% p.a. from the date of plaint till the date of payment.
2. The case of the plaintiff is that the plaintiff being a Company incorporated under the Indian Companies Act, 1956, carries on business as an importer and trader in “Steam Coal”. The first defendant is a licensed insurer incorporated under the Indian Companies Act, 1956. The first defendant is carrying on Insurance business throughout India and Chennai through the third defendant. The plaintiff, in the course in their business had availed a “Standard Fire and Perils Policy” with an extended cover against the risk of spontaneous combustion and earth quake covering stocks of “Steam Coal lying in open” at Chennai. The plaintiff has taken two policies, [1] Policy No.OG-05-1901-
4000500000041 and [2] Policy No. OG-05-1901-40005-00000042. At the request of the plaintiff, the defendant increased the sum insured under the said two policies. The revised sum insured for the first policy is Rs.15Crores and for the second policy is Rs. 75Lakhs.
3. The importers for commercial and economic reasons seeks storage of implied Cargo at the Port itself and such an act is known as Bonding of Cargo. After the arrival of cargo which lands in the Indian shore, customs duty is payable, even if the cargo is destroyed by fire, spontaneous Combustion or other Act of God and perils.
4. The second insurance is to cover such custom duties. The meaning and implication of “spontaneous combustion” as agreed upon between the parties is that the subject matter insured viz. the Steam Coal is prone to inherent combustion and without an external fire, can ignite on its own without any external factor. Combustion refers to ignition and spontaneous combustion means self ignition implying that without external fire the coal can ignite on its own.
5. On 18.07.2004 there occurred a fire, due to spontaneous combustion of the coal stacked. Spread of fire was noticed at various places on the coal heaps at Port. The port Trust intimated the plaintiff about the occurrence of fire and the plaintiff took all necessary steps to put out the fire. The Fire Service Department at the Port were alerted by the plaintiff as soon as the fire had emanated. All necessary steps were taken and precautions to minimize the loss. The policy stipulates that the loss should be notified, as soon as possible forthwith and the plaintiff has taken the least possible time after the occurrence of the event to inform the defendants.
6. Having regard to the volume of Steam Coal, when a fire accident took place, it would be impossible to shift large quantities of coal such as 30,000 tons from one location to another. Therefore, there was no delay in communicating the loss to the defendants.
7. The defendants appointed M/s.Bhatwadekar & Company, a licensed surveyor. They visited Chennai Port on 29th and 30th of July and 2nd of August,2004. During the period of fire, the plaintiff has been seeking the assistance of Assistant Traffic Manager, Chennai Port Trust for putting out the fire and smoke by sprinkling water and seeking co-operation to depute the Port fire service in the event of worsening of the situation. In the meantime, the plaintiff received communications from the defendants attributing the cause of loss to the plaintiff falsely and the same were also answered in detail.
8. Due to spontaneous combustion and fire damages, the value of coal was diminishing with every passing minute. The buyers sought to purchase the same at a lesser value prevailing than the market price. Therefore, the plaintiff was forced to sell steam coal as the value was diminished due to combustion and smearing ashes which got settled on the coal, consequent upon the spraying of water. This was intimated to the defendant by letter dated 11.11.2004.
9. The contract of insurance is one of the indemnity and to minimize the loss. The plaintiff, subsequent to the occurrence of the event on 26.07.2004, arranged for the sale of the damaged coal in “as is where is condition”. The plaintiff also took the assistance of the surveyor and they also filed their report. The plaintiff had submitted a claim bill for Rs.2,90,79,820/- representing the difference between the gross claim and the total sale proceeds of the coal affected by ashes and water.
10. The defendant was called absent and set ex parte. The Power of Attorney of the plaintiff's Company has been examined as P.W.1. Totally, 37 documents have been marked. Policies are marked as Ex.P4 to Ex.P7. The Insurance Company repudiated the claim in its letter dated 16.06.2005, which is marked as Ex.P34 and the repudiation is mainly on the basis that the plaintiff had not taken prudent steps to avoid and minimise loss and that he breached the terms. It is not stated how the terms were breached and how the plaintiff had not acted prudently. The claim made by the plaintiff is marked as Ex.P33. Through the evidence of P.W.1 and the Exhibits marked through him, the plaintiff has established its claim and therefore, the plaintiff is entitled to the reliefs sought for in the suit.
11. In the result, the suit is decreed as prayed for. No costs.
17.03.2017 Index : Yes/No bsm/gya P.KALAIYARASAN, J.
gya C.S.No.759 of 2006 17.03.2017 http://www.judis.nic.in