TMI Blog2004 (12) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... , machinery and accessories and furniture and other contents and the other bearing No. 101600/3101670/0 regarding stocks and used/burn lubricating oil and refined oil in its factory premises consequent upon a fire being repudiated by the Insurance Company, Opposite Party No. 1. The insured Polymat India Pvt. Ltd. is a factory measuring 251'x 150' and is bounded by 7' high brick wall on South and Chain-link fencing on the North, East and West Sides. Inside the factory premises the Complainant had a shed measuring 101' x 41' constructed of brick wall with asbestos sheets louvers at upper and asbestos sheets roofing on tubular frame structure. Attached to the South side of the shed was a lean-to structure measuring about 85' x 25' and constructed of brick walls and roofing on tubular frame. The construction was divided into several rooms housing the office, quality control laboratory, workshop-cum-rest room and store room for tools and equipment. These rooms had their opening inside the shed. In the said factory a Dove-tail batch type acid and clay treatment process for refining the used/burnt lubricating oil was undertaken. The raw material for the process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the location of the property was mentioned as factory-cum-godown and office premises , though there was no godown in the factory premises. Thereafter on 13th January 1993 the said factory premises and the entire building, furniture, fixtures and fittings, stocks in process and other material lying outside factory shed were completely destroyed in fire. The insurance company appointed one Shri S.N.M. Consultants as the Surveyors. The Surveyors visited the premises and conducted an inspection. The complainant supplied all information sought by the surveyors. The complainant was informed by the surveyors that they had been instructed by the opposite parties not to assess loss to the plant and machinery, furniture, fixtures and fittings and civil structure outside the covered shed and building and all that plant and machinery which were lying installed in the open part of the factory premises were not allowed to be covered by the insurance. Therefore, the Surveyors only assessed the losses inside the covered area. The Surveyors were also informed that they were supposed to assess the loss inside the covered area only. The complainant from the very beginning requested the Insurer to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... khs as a non-standard claim because under the policy the premises was described as of 1st class construction. The Insurance Company refuted the other allegations and explained that they disallowed the claim relating to plant and machinery outside the covered area installed outside the building and had also not considered the claim of the goods i.e. the drums of oil lying in the open within the factory precincts. It is also contended that the complainant was not kept in dark about the basis of settlement. It was also urged that regarding queries of the Complainant, a letter dated 12th August, 1994 was sent giving details to the complainant, which was received by the complainant on 31st August, 1994. In this background., National Commission examined that whether the claim of complainant is justified or not. The Commission after considering the matter took view that the factory premises includes the plant machinery and goods inside the shed and outside the shed are covered under both fire policies. The commission relied on the definition of the factory as given in the Factory Act 1948. It was also observed that as per the guidelines in settling the claims 75% of loss should have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory premises in the open. It may also be relevant to mention here that after the proposal form was received by the complainant and they immediately requested by a letter on 20th April 1992 to National Insurance Co. pointing out certain discrepancies in both the policies and requested to carry out corrections in both the policies, i.e., request for incorporating the name of the Allahabad Bank, Camac Street, Calcutta as mortgagee along with West Bengal Financial Corporation, secondly, the coverage of plant and machinery inside or outside the building and the coverage for stock and stock in process and lastly the expression 'Godown cum factory' be deleted as there is no 'godown'. Letter dated 20th April, 1992 reads as under: Polymat India Pvt. Ltd. 1/B , D.L. Khan Road Calcutta 700 027 20th April 1992 The National Insurance Co. Ltd. Calcutta Division XVIII, 6, Lyons Range, Calcutta 700 001 Sub.: Correction in Policy No. 101600/3101669/0(BMC) Policy No. 101600/3101670/0 (SSP) Dear Sir, With reference to the captioned two policies delivered through your Development Officer, Mr. Guha, palease note the following discrepancies which please amend and oblige ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aspects and immediately rushed to direct to pay 75% of the loss assessed by the surveyors. Now, the question whether the expression Factory-cum- Godown includes all plant machinery and all goods lying within the boundary wall of the factory, was covered under both the Policies. The expression Factory has been defined under Section 2(m) of the Factories act which reads as under: Factory means any premises including the precincts thereof- (i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or (ii) whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on, - but does not include a mine subject to the operation of the Mines Act, 1952, a mobile unit belonging to the armed forces of the Union, a railway running shed or a hotel, restaurant or eating place. The factory has also been defined in the Law Lexicon: A building ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows that the goods lying in covered area were only insured and none else. In this connection, a reference may be made to series of decisions of this Court wherein it has been held that duty of the Court to interpret the document of contract as was understood between the parties.. In the case of General Assurance Society Ltd. Vs. Chandmull Jain reported in 1966 (3) SCR 500 at pages 509-510, it was observed as under: In interpreting documents relating to a contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves. Similarly, in the case of Oriental Insurance Co. Ltd. Vs. Samayanallur Primary Agricultural Co-op. Bank resported in (1999) 8 SCC 543- Para 3 at page 546-f, it was observed as under: The insurance policy has to be construed having reference only to the stipulations contained in it and no artificial farfetched meaning could be given to the words appearing in it. Therefore, the terms of the contract have to be construed strictly without altering the nature of the contract as it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n should have examined the matter in detail in terms of the policy and the relevant documents bearing on the subject. This was not done. Therefore, we have no hesitation to say that what was sought to be covered by both the Policies was only plant and machinery in shed and not the goods which were lying outside the plant and shed. Next question is whether the reduction of the amount by insurance company under various heads is justified or not? We have gone through the reasons given by the Insurance Company for reducing the amount and we are of the opinion that the reasons given by the Insurance Company appear to be reasonable and justified which read as under:- 1. Though surveyor assessed the total loss on building as ₹ 5,52,049/- but while computing we only accepted ₹ 4,97,049/- as the balance amount of ₹ 55,000/- is assessment relating to the portion which is not inside the building. 2. Regarding plant and machinery though the surveyor assessed ₹ 24,61,757/- but we considered ₹ 14,97,651/- and rest ₹ 9,64,106/- was related to the assessment of the plant and machinery installed outside the building. 3. Regarding assessment of furnit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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