BEFORE THE HIGH COURT OF JUDICATURE AT MADRAS DATE : 23.07.2008 CORAM THE HONOURABLE MR.JUSTICE A.C.ARUMUGAPERUMAL ADITYAN A.S.No.95 of 1999 M/s.Pithavadiyan & Partners, rep. by its Managing Partner, 14,College Road, Chennai-6. .. Appellant / Plaintiff Vs. M/s.Oriental Insurance Co. Ltd., Regional Office, UTL Building, 4th Floor, Esplanade, Chennai-1. .. Respondent / Defendant Prayer:-This appeal has been preferred under Section 96 of CPC against the decree and judgment dated 16.04.1998 in O.S.No.2801 of 1996 on the file of the VIII Additional Judge, City Civil Court, Chennai. For Appellant : Mr.V.Bhiman, for M/s.Sampath Kumar Associates For Respondents : Mr.S.Arun Kumar, Advocate JUDGMENT This appeal has been directed against the judgment in O.S.No.2801 of 1996 on the file of the VIII Additional Judge, City Civil Court, Chennai. 2.The averments in the plaint in brief relevant for the purpose deciding this appeal are as follows:- The plaintiff is a partnership firm registered under the Indian Partnership Act, carrying on business at Madras. The defendant is a limited company incorporated under the Companies Act, having its registered office at New Delhi, and carrying on business among other places with its Regional Office at UIL building, Chennai. The plaintiff as a Firm of Architects and Planners, has been undertaking jobs of designing, planning and supervision of huge constructions. It took out an insurance policy with the defendant https://hcservices.ecourts.gov.in/hcservices/ for 'Professional Indemnity Insurance for Architect and Consulting Engineers', under which defendant undertook to indemnify the plaintiff against legal liability for bodily injury and property damage including damage to any defects in the object planned, designed or supervised by the plaintiff, if the cause of the damage or loss is attributable to culpable infringement of acknowledged technical rules which may be discovered during the period between 26.05.1982 to 25.05.1983, in the conduct of the plaintiff's business as Architect/Consulting Engineers within India, to the extent of Rs.5,00,000/-. This policy was signed at Madras by the defendant on 17.09.1982. The plaintiff took up the work of designing, planning and supervising the construction of the Main Factory Building at Hyderabad of AR Expresso Systems India Ltd. On 3rd October 1982 at 1.15 pm, the said building under construction suddenly collapsed, resulting the entire superstructure rumbled down and became dust and debris. This collapse occurred entirely due to inadequancies and deficiencies of design of the construction, by plaintiff. Loss of Rs.11 lakhs suffered by AR Expresso Systems (India) Ltd., had to be borne by the plaintiff. Under the insurance policy the plaintiff claimed Rs.5 lakhs being the insured amount from the defendant. After protracted correspondence, by its letter dated 6.4.1984 the defendant sent a copy of its letter dated 28.2.1984 wherein it had repudiated its liability to pay any amount under the policy on the ground that the collapse of the structure was caused by faulty centering, which is not a contingency covered by the Architects' Indemnity Policy issued to them. Plaintiff has not received the original of the letter dated 28.02.1984 alleged to have been sent by the defendant. The repudiation of liability by defendant is untenable as the collapse of the structure was not due to 'faulty centering' but owing to inadvertant faulty, designing by the plaintiff. Hence, the suit. 3.The defendant in his written statement would contend that the allegation that the entire superstructure tumbled down and became just debris and the collapse occurred entirely due to inadequcies and deficiencies of the design of the construction is not admitted by the defendant. This defendant is not liable to bear the loss of Rs.11 lakhs suffered by the contractor since the defendant is not aware of any contract entered into by the plaintiff with the contractor and the indemnity policy is not based upon any such contract. Hence, the plaintiff is not entitled to claim Rs.5 lakhs from the defendant under the insurance policy. The collapse of the building was not due to faulty designing but due to faulty and defective centering. The claim that even if the collapse is not due to faulty design, it is due to negligent supervision of the plaintiff is also denied and hence the plaintiff is not entitled to any compensation under the policy since the policy does not cover supervision of the day to day https://hcservices.ecourts.gov.in/hcservices/ construction of the factory. This defendant has agreed to indemnify the plaintiff against the legal liability for bodily injury and property damage including the damage to any object, planned, designed or supervised by the plaintiff, only if the cause of the damage or loss is attributable to culpable infringement of acknowledged technical rules relating to faulty design or plan. Except the admission as to the effect that the plaintiff is not liable to their employing firm M/s. AR Expresso Systems (India) Ltd., the plaintiff has not set out how they are liable for the damage or loss, which is attributed to a culpable infringement, of acknowledged technical rules. Further, what is covered under the policy is restricted to the plaintiff's supervision of the plan or objects designs and not any other general supervision such as construction work which is left to some other agency of contractors and their Engineers. In other words, this defendant has covered by the policy any damage and defects in those Civil work of objects which are designed and planned by them and are subject to supervision from time to time during the construction to ensure that the buildings are constructed according to the plans and designs prepared by them, and not for over all supervision, even those losses are capable of being indemnified if only such plans objects or designs are attributed to any infringement of acknowledged technical rules and this defendant is not liable to pay the damages as asked for in the plaint since the same is not covered under the policy. According to this defendant, the contractor has insured the construction independently under a policy issued by United India Insurance Co., in an Erection All Risk Insurance Policy covering Civil works for a sum of Rs.20 lakhs for the period from 9.8.1982 to 9.8.1983 and the policy covered all permanent Civil Engineering Works such as buildings foundations earth work including materials for the construction therein. The designs appear to have been calculated by a competent Engineer in four separate design calculations and similarly for beams also separate designs have been calculated. It appears, therefore, that there are no design problems. The incident appears to have taken place on 03.10.1982, during lunch break when concreting of slab FF 15 was in progress. The United India Insurance Company have had the entire accident surveyed, photographed and inspected by the Surveyors on 27.12.1982. The photographs clearly establish that the collapse was due to an accident and not because of any defective design. The collapse was due to faulty centering and not due to any faulty design or plan. Meanwhile the plaintiff appears to have sent structural Engineer and even prior to the survey by the Insurance Company, without notice to her Insurance Companies. United India Insurance Company's surveyor appointed a recongnised authority on design and construction to inspect the accident and he has ruled out any design short comings. The cause of damage is purely due to centering being provided by ordinary ballies resting on virgin soil. The ballies https://hcservices.ecourts.gov.in/hcservices/ were tied with coir matting and the centering was with folded plates and steel plates. The contractor has executed the work contrary to the design by concreting not to the full length but partially which resulted in exercising extra stress on the supporting beam which resulted in the collapse. The entire accident has occurred only due to faulty execution of the building and faulty centering and not because of defect in planning or design. The defendant is not liable under the policy since the policy does not cover any liability assumed by the plaintiff under contract and accepting the liability voluntarily that the collapse of the building was due to defective designing without reference to the defendant. This being an indemnity and liability policy the plaintiff should not have accepted the liability without reference to the defendant and obtaining the consent in writing from the defendant being an implied and a common condition in all indemnity policies. The plaintiff having violated the terms of the policy, the defendant will not be liable for any compensation to the plaintiff. Any additional risks assumed by the plaintiff other than those specifically covered by the policy of insurance issued by the defendant, this defendant is not liable. Hence, the suit is liable to be dismissed. 4.On the above pleadings the learned trial Judge has framed three issues for trial. The Supervisor of the plaintiff-firm by name Prabakara Devaraj was examined as P.W.1. Another Consulting Engineer by name Zakriya George was examined as P.W.2. Ex.A.1 to Ex.A.25 were marked on the side of the plaintiff. On the side of the defendant, the Deputy Manager of the defendant – Insurance company was examined as D.W.1 and the Director of Standard Surveyors Limited was examined as D.W.2. Ex.B.1 and Ex.B.2 were marked on the side of the defendant. The written statement filed by the first defendant in O.S.No.410 of 1987 on the file of the Court of Subordinate Judge, Hydrabad, was marked as Ex.C.1. 5.The learned trial judge after meticulously weighing the evidence both oral and documentary has come to the conclusion that the plaintiff is not entitled to any relief under the plaint and accordingly dismissed the suit with costs, which necessitated the plaintiff to approach this Court by way of this appeal. 6.The points that arose for consideration in this appeal are as follows:- 1)Whether the plaintiff / appellant is entitled to claim the policy amount of Rs.5 lakhs from the defendant / respondent Oriental Insurance Company in respect of an accident took place in the factory building at Hydrabad belonging to M/s. AR Expresso Systems (India) Limited, under the original of Ex.A.23-insurance policy. https://hcservices.ecourts.gov.in/hcservices/ 2)Whether the decree and judgment in O.S.No.2801 of 1996 on the file of the VIII Additional Judge, City Civil Court, Chennai, is liable to be set aside for the reasons stated in the memorandum of appeal? 7.Point No.1 :- The claim of the plaintiff / appellant in a nutshell is that the plaintiff as a Firm of Architects and Planners, undertook jobs of designing, planing and supervising of the main factory building of M/s.AR Expresso Systems (India) Limited, at Hydrabad (not a party in this suit) and that the plaintiff had taken an insurance policy under the original of Ex.A.23 with the defendant as against any legal liability for bodily injury, property damage including the damage to any defects in the object planned, designed or supervised by the Insured, if the cause of the damage or loss is attributable to a culpable infringement of acknowledged technical rules which may be discovered during the period between 26.05.1982 and 25.5.1983. The Insured amount is Rs.5 lakhs. According to P.W.1, he was appointed by the plaintiff-firm as the Architect and Consulting Engineer for M/s.AR Expresso System (India) Ltd., on 29.07.1981 for the purpose of preparing the plan and design according to the specification and estimate to the above said M/s.AR Expresso System (India) Ltd., for the construction of their factory at Hydrabad and that in the said building on the fateful day the centering of the building caved in and the said firm M/s.AR Expresso System (India) Ltd., had met with heavy loss, and that the plaintiff for their work had taken an Insurance policy with the defendant under the original of Ex.A.23 for the work they have carried out for M/s.AR Expresso System (India) Ltd., at Hydrabad. The suit was filed on the basis of Ex.A.23 claiming the insured amount of Rs.5 lakhs under the original of Ex.A.23 – Insurance Policy. But in the cross-examination P.W.1 would admit that he has not produced any estimate to show the damage caused to the factory building of M/s.AR Expresso System (India) Ltd., in the accident. Further, he would admit in the cross- examination that United India Insurance Company, the insurer of M/s.AR Expresso System (India) Ltd., had settled the claim to M/s.AR Expresso System (India) Ltd. He would further admit that he is not aware what was the amount paid by the United India Insurance Company to M/s.AR Expresso System (India) Ltd. He would further admit in the re-examination that M/s.AR Expresso System (India) Ltd., has changed its name of the company subsequently as M/s.AR Packaging System and the same has been admitted in the plaint in O.S.No.410 of 1987 – Ex.A.24) which was filed against (the present plaintiff) M/s.Pithavadiyan & Partners as D.W.1, F.B.Pithavadian as D.W.2, A.G.Krishna Menon as D.W.3, P.T.Krishnan as D.W.4 and J.Subramanian as D.W.5. At this juncture it is pertinent to note the written statement filed by D1 in O.S.No.410 of 1987. In the written statement filed by D1 in O.S.No.410 of 1987 (the present plaintiff in https://hcservices.ecourts.gov.in/hcservices/ O.S.No.2801 of 1996), which has been marked as Ex.C.1, D1 (plaintiff in the present suit O.S.No.2801 of 1996) has admitted that the plaintiff in O.S.No.410 of 1987 viz. M/s.AR Packaging System (India) Ltd., at Hydrabad, has reimbursed all the total loss incurred in the accident. But they would make counter claim in respect of the scrap steel, according to them, were collected from the debris of the collapsed portion of the factory building and sold by M/s.AR Packaging System Ltd. The counter claim made by D.W.1 in O.S.No.410 of 1987 on the file of the Court of Subordinate Judge, Hydrabad as D1 (present plaintiff) was Rs.3,84,340/-. At para 7 in Ex.C.1 D1 in O.S.No.410 of 1987 (plaintiff herein) had admitted in clear terms that the plaintiff - M/s.AR Packaging System (India) Ltd. had recovered compensation from its Insurance Company viz. United India Insurance Company on the policy covered the risk of damage or collapse of the construction of the factory building of M/s.AR Packaging System (India) Ltd. Only on the basis of the said admission in Ex.C.1 the learned Trial Judge has come to the conclusion that for the damage caused to the factory building of M/s.AR Expresso System (India) Ltd. (now renamed as M/s.AR Packaging System (India) Ltd.) in the accident, which took place on 3.10.1982 at 1.15 pm, M/s.AR Expresso System (India) Ltd., (now renamed as M/s.AR Packaging System (India) Ltd.) have already claimed the damages from their insurer viz., United India Insurance Company Ltd., and hence, for the same accident which took place on 03.10.1982 at 1.15 pm in the same building, the plaintiff in O.S.No.2801 of 1996 / appellant herein who is admittedly the designer for the said building engaged by M/s.AR Expresso System (India) Ltd., cannot claim damages from the defendant under the original of Ex.A.23 – insurance policy, the terms and conditions of which does not cover the said accident which was occurred due to collapse of centering of the building. 7(a) The learned counsel appearing for the respondent would contend that the learned trial Judge in his judgment while answering issue No.1 has observed that as per Ex.A.23 – policy the defendant is liable to pay compensation, which is to be set aside. But the respondent / defendant has not preferred any cross-appeal against the decree and judgment in O.S.No.2801 of 1996 in this regard. The findings of the learned Trial Judge that since the owner of the building viz., M/s.AR Packaging System (India) Ltd., Hydrabad, have already received insured amount from their insurer viz. United India Insurance Company, the plaintiff cannot now claim any amount under the original of Ex.A.23 from the defendant - M/s.Oriental Insurance Co. Ltd., because the accident took place in the same factory building belonging to M/s.AR Packaging System Ltd., Hydrabad, the plaintiff in O.S.No.410 of 1987 (Ex.A.24-suit). Under such circumstance, I do not find any reason to interfere with the findings of the learned trial Judge in O.S.No.2801 of 1996 on the https://hcservices.ecourts.gov.in/hcservices/ file of the VIII Additional Judge, City Civil Court, Chennai. Point No.1 is answered accordingly. 8.Point No.2 :- In view my discussion in the earlier paragraphs, I hold on Point No.2 that the decree and judgment in O.S.No.2801 of 1996 on the file of the VIII Additional Judge, City Civil Court, Chennai, need not be set aside for the reasons stated in the memorandum of appeal. 9.In fine,the appeal is dismissed confirming the decree and judgment in O.S.No.2801 of 1996 on the file of the VIII Additional Judge, City Civil Court, Chennai, with cost through out. Sd/- Deputy Registrar /true copy/ Sub Asst. Registrar ssv To 1) The VIII Additional Judge, City Civil Court, Chennai. 2) The Section Officer, V.R. Section, High Court, Madras-104. +1 cc to Mr.N.Rosi Naidu, Advocate, SR.No.39582 +1 cc to M/s.Sampath Kumar Associates, SR.No.39648 A.S.No.95 of 1999 SGL (CO) SMK/12.8.08 https://hcservices.ecourts.gov.in/hcservices/