NATIONAL INSURANCE CO. LTD Vs. RUCHIRA PAPERS LIMITED

JUDGEMENT

(1.) This revision petition has been filed under Section 21(b) of the Consumer Protection Act, 1986 against the order dated 23.05.2012 passed by the Himachal Pradesh State Consumer Disputes Redressal Commission, Shimla (hereinafter referred to as "State Commission") by which appeal filed by the present petitioner / opposite party against the order dated 14.05.2009 passed by the District Forum, Sirmour in complaint case No. 21/2005 presented on 18.03.2005 was partly allowed and the order of the District Forum was modified to the extent that instead of Rs. 10,61,210/-, a sum of Rs. 5,71,172/- was ordered to be paid by the petitioner to the complainant / respondent with interest @ 9% per annum from the date of complaint to the date of payment of the aforesaid amount of money in addition to litigation expenses of Rs. 3,000/-, awarded by the learned District Forum.

(2.) The brief facts of the case are that the complainant M/s. Ruchira Papers Ltd., Kala Amb, District Sirmour, Himachal Pradesh is a limited company and carries its business of manufacturing of kraft paper in their factory. The complainant got insured the building of factory, plant and machinery and other fittings through three cover notes No. 20973, 22463, 22162 for a period of one year. It has been stated that on the night of 27th / 28th November, 2004, at about 3.00 A.M., an explosion took place in the rag digester working in the factory for manufacturing of kraft paper, which caused extensive damage to the building and injuries to the workers resulting in the death of two workers. The matter was reported to the police and an FIR was also registered. The claim was also lodged with the petitioner insurance company. The surveyor deputed by the petitioner assessed the damage to the digester at Rs. 2.5 lacs after taking into account the depreciation and excluding the value of salvage. The surveyor also assessed the loss to the building at Rs. 1,45,878/-. However, the claim was repudiated by the petitioner on the ground that this was not a case of explosion and hence the risk was not covered under the relevant policy.

(3.) It has been stated in the complaint that the process involves cutting the old gunny bags and feeding them into the rag digester and chemicals like soda ash / caustic soda are added along with fresh water. The same is cooked after closing the digester lid tightly with steam pressure for about three hours. After three hours of cooking, the pressure is released by opening the vent line after stopping the digester. The digester lid is then opened and cooked pulp is dumped on the floor by rotating the digester. It has been stated that on the night of 27th / 28th November, 2004, the digester exploded as a result of which the complete system of rag digester including its building drive unit and roof good badly damaged. The cooked hot rags pulp along with steam violently splashed out, causing injury to the labourers and resulting into the death of two of them. The complainant stated that the loss of digester amounted to Rs. 6,50,000/- and building damage was to the extent of Rs. 5,05,452/- and hence the total loss was Rs. 11,55,452/-. The complainant demanded a sum of Rs. 11,55,452/- along with compensation of Rs. 1,00,000/- and interest of 18% per annum. However, it was maintained by the petitioner insurance company that the Executive Director of the complainant Shri J.N. Singh had given in writing that the accident occurred due to mechanical failure of lid lock of the Digester; it was not the case of explosion and hence it was not covered under the terms and conditions of the policy. The petitioner also obtained report from M/s. Z.V. Islam & Associates, which stated that there was no explosion.