New Delhi, Jan. 14: The national consumer commission has asked an insurance company to pay for damages a lightning-struck insured building suffered, over- turning a state forums order that said the bolt from the sky may not have been the reason.
Edassery Ceramics was building a factory to manufacture decorative tiles in Palayamparambu, Kerala, when the structure collapsed the day it was to be opened for a trial run.
The building and the machinery had been insu- red by the Kerala State Insurance Department for Rs 49,07,000 and the policy covered caused by both fire and lightning.
The estimated cost of the project was Rs 62 lakh, of which Rs 32 lakh was sanctioned by the Kerala Finance Corporation.
The technical manager of the corporation had inspected the building on August 18, 1998, and expressed satisfaction with the quality of the construction.
But on September 1, as the unit conducted the trial run, a pillar collapsed under heavy rain, thunder and lightning.
Edassery Ceramics put the losses at around Rs 21 lakh, blamed lightning for the collapse and informed the insurance department the next day.
The insurance company, however, blamed the accident on defects in construction or a short circuit and refused to pay for the damages.
Edassery Ceramics then moved the state consumer commission. In the state commission, the insurance company claimed that Prudential Surveyors Private Limited, appointed to assess the loss, had blamed the collapse on excessive load of materials stored in the unit.
It also claimed the building had been constructed in a paddy field without testing the soil conditions. The lightning, too, wasnt serious enough that day, it said.
The surveyor didnt accept the weather report issued by the Met department and the state consumer commission held that lightning may not have been a probable cause for the buildings collapse.
Edassery Ceramics then appealed to the National Consumer Disputes Redressal Commission.
The national commission took note of the weather forecast for September 1, which said gusty winds would sweep through the area the factory was located in.
The maximum wind speed would be 45kmph and the strong winds would be accompanied by thunder and lightning, the forecast said.
The commission also examined eyewitnesses before awarding Rs 18 lakh as compensation to Edassery Ceramics. It said loss had occurred due to lightning while the insurance policy subsisted.
The national commission also asked the insurance company to pay a yearly interest of 9 per cent on the Rs 18 lakh from March 1, 1999 till it paid the amount.
The insurance company was also asked to pay Edassery Ceramics Rs 10,000 as cost of litigation.
It was a case of arbitrary denial of insurance claim, advocate C.N. Sreekumar, who represented Edassery Ceramics at the national commission, said. Especially when the policy cover ed fire and lightning.
The insurance company has not yet appealed against the order, though technically it can approach the Supreme Court.
It has to pay up unless it gets a stay from the top court.