RSA No. 2388 of 2010 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No. 2388 of 2010 (O&M) Date of decision 25.7.2011. The Oriental Insurance Company ...... Appellant. versus M/s OSAW Agro Industries and another ...... Respondents. CORAM : HON'BLE MR. JUSTICE K.C.PURI Present : Mr. V.Ramswaroop, Advocate for the appellant. Mr. Amit Jaswal, Advocate for respondent No.1. Mr. G.D.Gupta, Advocate for respondent No.2. K.C.PURI . J. Challenge in the present regular second appeal is the judgment and decree dated 17.3.2010 passed by Ms.Aaradhna Sawhney, learned Additional District Judge, Ambala vide which the appeal preferred by defendant against the judgment and decree dated 17.1.2009 passed by Shri Praveen Kumar, Civil Judge (Senior Division), Ambala was set aside. The brief facts of the case are that plaintiff is a company duly RSA No. 2388 of 2010 2 incorporated under the Indian Companies Act, 1954 having its registered office at Ambala Cantt and Sanjeev Sagar is its Managing director and is duly authorized to file the present suit. The plaintiff is having its building known as M/s SAW Agro Industries Pvt. Limited, Osaw Complex, Jagadhri Road, Ambala Cantt and the plaintiff got the building duly insured with the defendant No.1 under policy No.CA 17737 which was upto 16.8.2004. There was a heavy flood on 3.8.2004 in the area due to heavy rains as a result of which the boundary wall on the southern side had fallen down which is shown brown in the site plan. For the said southern side boundary wall, the plaintiff lodged the claim with defendant No.1 and the defendant No.1 after due formalities paid a sum of Rs.98,247/- through cheque dated 19.1.2005. The said policy was going to expire on 16.8.2004 and the plaintiff in continuation of the same without any break got the policy renewed from defendant No.2 under cover note No.0127999 dated 16.8.2004. On 26.8.2004, the plaintiff noticed the huge cracks have developed in the eastern side boundary wall as shown red in the site plan also and the water was perforating through the same and the drain along with the said wall was also badly damaged as the flood water was standing in the adjoining fields. The plaintiff immediately reported the matter to defendant No.2 under bona fide impression that defendant No.2 with which the insurance policy was renewed, is liable in the matter. The plaintiff lodged the claim of Rs.1,43,623/- with defendant No.2 for damage to the said eastern wall etc. Defendant No.2 duly deputed D.K.Gulati as the Surveyor in the RSA No. 2388 of 2010 3 matter who surveyed the site and gave his report to defendant No.2. Defendant No.2 duly processed the claim but defendant No.2 for the first time on 10.3.2005 informed the plaintiff that the claim relates to the flood occurred on 3.8.2004 and that the policy was issued by them for the period from 17.8.2004 to 16.8.2005 and as such they are not liable in the matter. The plaintiff had been taking up the matter with the higher authorities of defendant No.3 and they finally in June 2005 refused to do anything in the matter and sent the claim papers to defendant No.1 along with survey report etc. for settlement of claim as per survey report vide letter dated 24.6.2005. The plaintiff also wrote to the defendant No.1 in the matter on 9.6.2005 but defendant No.1 refused to do anything in the matter vide reply dated 21.6.2005 on the ground that they have already paid the amount in full and final settlement. It has been averred by the plaintiff that the amount of Rs.98,247/- paid by National Insurance Company – defendant No.1 in January 2005 was with respect to the loss sustained by the southern boundary wall, even at that time, claim with respect of the loss suffered by the eastern boundary wall of the premises was under process with defendant No.2. After the denial of liability by Oriental Insurance company, several protest letters were issued to them asking them to make the necessary payment, even a complaint was made to the Insurance OMBUDSMAN who refused to do anything in the matter on the ground that defendant No.1 is liable to make the payment. It has also been alleged by plaintiff that both defendant No. 1 and 2 i.e. National Insurance Company Limited and Oriental Insurance Company Limited are Government undertakings and are shifting the blame on one another resulting in harassment of the plaintiff RSA No. 2388 of 2010 4 company, it has also been categorically averred that defendant No.2 failed to take the necessary decision in the matter at the earliest and kept on sleeping the issue for a period of six months despite the fact that several reminders were served upon them and called had a timely decision been taken by defendant No.2 plaintiff would not have been able to approach the National Insurance company for settlement of claim on account of loss suffered by the southern boundary wall of the premises, but of no use. Hence this suit. Upon notice, defendants appeared and filed separate written statements. In the written statement filed by defendant No.1 the suit was preliminary objected on on the grounds of estoppel, cause of action, civil court having no jurisdiction etc. On merits, categorical stand taken by National Insurance company was that no doubt due to heavy floods, southern wall of the factory premises owned by the plaintiff was damaged, but no cracks in the eastern wall were noticed at the time of inspection, after processing the claim a sum of Rs.98247/- was paid to the plaintiff by way of cheque on 19.1.2005 which he accepted without any objection. Thus according to National Insurance company, plaintiff is not entitled to file another suit for similar case, when he has already received claim on account of loss suffered by factory premises as a result of flood that occurred on 3.8.2004. It was also pointed out that the building in question was insured by National Insurance company till 16.8.2004 and that from 17.8.2004 the building in question was got insured by plaintiff from Oriental Insurance company – defendant No.2 for a period of one year beginning from 17.8.2004 to 16.8.2005. therefore, defendant No.1 is not liable to pay any RSA No. 2388 of 2010 5 compensation on account of cracks in the walls that were noticed for the first time on 26.8.2004 as the Insurance policy with the National Insurance Company had already expired on 16.8.2004. Further according to them, the matter was rightly reported to defendant No.2 who deputed D.K. Gulati as Surveyor in the matter and who after inspecting the site gave his report, the dispute as per defendant No.1 is strictly between defendant No.2 and plaintiff and since National Insurance Company has already paid the claim, it is under no legal obligation to pay the amount asked for by the plaintiff. While denying other allegations levelled in the plaint, it was prayed that the suit is without any merit, cause of action and deserves to be dismissed. Defendant No.2 in its written statement took several preliminary objections, regarding estoppel, maintainability, cause of action etc. Categorical stand of defendant No.2 was that the premises of the plaintiff was insured by their company from 17.8.2004 to 16.8.2005 whereas the loss was caused to the eastern wall of the building as a result of floods that occurred on 3.8.2004 on this day, the factory premises was insured by defendant No.2, it was only defendant No.1 i.e. National Insurance Company that was liable to pay the claim. Report of Surveyor was also referred to who as per defendant No.2 very clearly mentioned the date of loss as 3.8.004 when floods engulfed Ambala. Thus as per defendant No.2, it was well within their rights to turn down/reject the claim filed by the plaintiff on account of loss caused to the eastern wall of its factory premises as a result of floods that took place on 3.8.2004. The other allegations made in the plaint were specifically and categorically denied and it was prayed that suit being without any merit deserves dismissal. RSA No. 2388 of 2010 6 Replication was filed, wherein plaintiff reiterated the contents of plaint and controverted the averments made by defendants in their written statements. On the pleadings of the parties, following issues were framed:- 1. Whether the plaintiff is entitled to the mandatory injunction directing the defendants to pay the claim for the loss as alleged? OPP 2. Whether plaintiff is estopped by his own act and conduct from filing the present suit?OPD 3. Whether present suit is not maintainable, as alleged?OPD 4. Whether plaintiff has no cause of action? OPD 5. Whether suit is bad for misjoinder of the parties? OPD 6. Whether this court has no jurisdiction to entertain and try the present suit? OPD 7. Relief. 7. The parties have led their respective evidence in support of the aforesaid issues. The trial Court after appraisal of the evidence, decreed the suit of the plaintiff vide judgment and decree dated 17.1.2009 passed by Shri Praveen Kumar, Civil Judge (Senior Division), Ambala. 8. The defendants preferred Ist appeal and the learned Additional District Judge, Ambala vide judgment and decree dated 17.3.2010 accepted the appeal, and held that Oriental Insurance Company is liable to pay the decretal amount. 9. Feeling dis-satisfied with the aforesaid judgment passed by the RSA No. 2388 of 2010 7 learned Additional District Judge, Ambala, the defendant/appellant has preferred the instant second appeal. 11. The appellant in paragraph No.8 of the grounds of appeal has mentioned that following substantial questions of law have arisen in the present appeal :- A) Whether the claim without taking into consideration the real cause of damage, could be fastened on the appellant ignoring the factum of flood and water logging in the area ? B) Whether for considering cases of claims for damages date of approximate cause of damages is not taken into consideration ? C) Whether mere currency of policy without going into the real cause of damage and the time which was a crucial factor for happening such damage could be overlooked ? 13 I have heard learned counsel for the parties and have gone through the records of the case with their able assistance. 14. The only dispute raised during the course of arguments is that since the damage to the insured property has taken place due to the floods which occurred prior to the commencement of the policy of Oriental Insurance Company i.e. from 17.8.2004 to 16.8.2005 and as such the National Insurance is liable to pay the amount of compensation as the floods have taken place during the commencement of the policy of National Insurance i.e. from 17.8.2003 to 16.8.2004. It is submitted that admittedly the floods have taken place on 3.8.2004. To counter this argument, counsel for the respondent National Insurance Company has submitted that National Insurance Company has paid the damages which occurred due to the floods vide cheque for RSA No. 2388 of 2010 8 Rs.98,242 dated 19.1.2005. The other wall of plaintiff company was damaged after 16.8.2004 and as such National Insurance Company is not liable to pay the claim. I have carefully considered the said submission and have gone through the records of the case. So far as the claim of M/s Oswa Agro Industries Pvt. Ltd regarding damages to the property during the intervention of 16.8.2004 to 17.8.2005 is concerned that has not been challenged by either of the parties. Otherwise also it is concurrent finding of fact that plaintiff is entitled to claim the decretal amount on account of damages to the property of the plaintiffs during the commencement of the insurance policy. So, that being a finding of fact cannot be agitated in view of Section 100 CPC. Now the question required to be settled is inter se between the two Insurance Companies It is a matter of concerned that they are shifting the liability on each other. It is not disputed that floods have occurred on 3.8.2004 and there was a damage to the property of the plaintiff firm and the claims of the plaintiff firm have been settled by National Insurance Company by paying the amount of Rs.98,247/- on 19.1.2005. The dispute is in respect of payment of the amount which has occurred during the commencement of policy with Oriental Insurance Company. It is not disputed that the property of M/s Oswa Agro Industries Pvt. Ltd. was insured with Oriental Insurance Company during the period from 17.8.2004 to 16.8.2005. It is also not disputed that damage to the property was in addition to the damage to the property regarding which National Insurance Company has settled the claim. Since the damage has caused during the RSA No. 2388 of 2010 9 period of commencement of policy with appellant Oriental Insurance Company and as such the First Appellate Court has rightly held the appellant Company is liable to pay the amount. So, the substantial questions of law raised above stand determined against the appellant. 19. In view of the above discussion, the appeal is without any merit and the same stands dismissed 20. A copy of this judgment be sent to the trial Court for strict compliance. ( K.C.PURI ) JUDGE July 25, 2011 sv