TAMIL NADU ELECTRICITY BOARD Vs. NATIONAL INSURANCE COMPANY

JUDGEMENT

(1.) This suit has been filed for a money decree for a sum of Rs. 24,70,000/- together with future interest at the rate of 18% from the date of plaint till realisation and for costs.

(2.) The plaint allegations are as follows : Plaintiff is a power generating unit. The power generated are carried away through the massive and full length cable with the capacity of 230 KVA from the depth of 170 meter shaft to the distribution unit. In order to attain full perfection and to avoid any defective supply one full legnth cable of 330 to 250 meter is used, which is imported from France at a cost of Rs. 13.00 lakhs. Within the cable snaff (wall) lightings are provided for periodical inspection and maintenance. The entire equipments, cable covers, shaft and the ancilliaries within the Unit II of Kadamparai pump station, Hydro Electric Project Minparai at Coimbatore are insured with the defendant for a total sum of Rs. 14,56,73,000/- under the policy number 500300/ 33/04040/89 dated 30-11-1989 at the premium of Rs. 3, 11, 376/- for the period from 1-12-1989 to 30-11-1990. On 12-6-1990, due to direct falling of the light fittings and conduit pipes from the height with high velocity, the PVC cover and aluminium armour of the cable at the bottom place was ripped off. Due to this the cable got burnt and the entire system broke down, which was due to the external force. Due to the accident, the cables covered under the item No. 12 of Annexure to the policy became useless. On the basis of the claim lodged by the plaintiff with the defendant, the defendant sent his investigating agency viz. M/s. Bhatawadekar Company to inspect the accidental site. They visited the site on 22-6-90 and completed its inspection. The said company requested for certain details vide their letter dt. 23-6-90 from the plaintiff and the plaintiff immediately furnished the same by its letter dt. 13-12-90. The loss was estimated at Rs. 13,33,333/-. After giving credit to the scrap value, the claim lodged to the defendant as per letter dated 27-6-1990 is Rs. 13.00 lakhs. As nothing was heard from the defendant, the plaintiff wrote to the authorised agent on 1-2-1991 to enquire about the progress towards the claim. By a letter dt. 12-2-91 the agency had informed that they have submitted a report to the defendant already. The defendant vide letter dt. 5-2-1991 informed the plaintiff that they have refused the claim as unacceptable. The defendant misconstrued the terms of the policy relating to exclusion class and stick to the stand adamently. The plaintiff requested the defendant to furnish the survey report of its agency. But the defendant sent a letter dated 10-8-92 stating that the same is confidential one. The reason adduced by the defendant for not honouring the commitment is untenable, unreasonable and unjustified. The accident occurred due to external and outside force. Hence the same cannot be construed as the short circuiting within the particular electrical machine. The outside device caused damage to the cable. The defendant without appreciating the purpose for which the equipments are insured and on the wrong interpretation of the clauses in the policy declined to honour their commitment, which caused loss to the plaintiff and delayed the process to rest the system. The reason given by the defendant could be possible, only if there were joints in the cable or there was connection of any other cables. The cable was one full length and there are no joints to allow arcing. The short circuiting is caused only by passing into contact of two wires. This is also not possible as the cable is fully insulated. The suit claim covers only actual amount spent by the plaintiff in replacing the damaged cables. Under the terms of the policy, the insurer has undertaken to bear such losses. The defendant is liable to reimburse the said loss under the policy of insurance. Hence the present suit.

(3.) The defendant filed a written statement contending that the suit claim is barred by limitation and that the communication dated 10-8-82 by the defendant is only a reiteration of their denial of liability or disclaimer of liability as set out in their letter dated 5-2-1991. In view of the admission made by the plaintiff that the defendant disclaimed liability as early as 5-2-91, any suit as against the defendant ought to have been filed within three years from the date of disclaimer as per the law of limitation. The present suit instituted and presented before this Court on 8-8-1995 is clearly barred by law of limitation. The occurrence resulting in the claim in question took place on 12-6-1990. As per condition No. 6(ii) of the policy, the action, if any, should have been initiated before 12-6-1991, in the absence of any disclaimer within the said period of 12 months from the date of occurence. The defendant disclaimed their liability on 5-2-91. As per condition No. 6(ii) of the Policy, the action should have been initiated by the plaintiff on or before 6-2-1992. No right was available to the palintiff after 5-2-92. The plaint filed in this Court is clearly hit by condition No. 6(ii) of the relevant fire policy. Since the plaintiff initiated action beyond the period of three years from the date of disclaimer, the suit is liable to be dismissed. The defendant is obliged to statutorily appoint a licensed independent surveyor under the Insurance Act and Rules thereunder to investigate any claim in excess of Rs. 20000/- and after obtaining the report on such an independent surveyor alone, a claim under a policy of insurance can be settled. M/s. Bhatwadekar and Co. appointed by the defendant as surveyor had issued their report dated 5-7-90. The finding given in the said report was made after due investigation and inspection, carried out at the site. The attempt made by the plaintiff to attribute the cause as one which is external and therefore the policy exclusion is not applicable is patently erroneous and illegal. Exclusion No. G is not making any definition between any internal or external cause. On the order hand it will be attracted whatever might be the cause including lightning. The claim under the policy on merits is not payable as per exclusion "G" of the fire policy in question. The report of the surveyor is a privileged one which as per the custom of the industry is not to be released to the insured as it is purely confidential and obtained as per the statutory pre-requisite prescribed under the Insurance Act. There was no delay on the part of the defendant in investigating the claim. No amount is due and payable by the defendant to the plaintiff and the suit claim is excessive, inflated and illegal. The plaintiff is not entitled for any relief. No interest is payable much less at the rate at which interest is claimed. Therefore, the suit may be dismissed with costs.