Case nº Original Petition No. 398 of 2000 of National Consumer Disputes Redressal Commission, September 05, 2013 (case 1. Adarsh Chemicals & Fertilizers Ltd., 2. Dr.Prakash D.Patel Director Adarsh Chemicals & Fertilizers Ltd. Vs United India Insurance Company Ltd.)

JudgeFor the Complainants: Mr. Anil Nauriya, Advocate With Ms. Sumita Hazarika, Advocate and For the Opposite Party: Mr. P.K. Seth, Advocate
PresidentMr. J.M. Malik, Presiding Member and Dr. S.M.Kantikar, Member
DefenseInsurance Act, 1938 - Section 64-UM(2)
Resolution DateSeptember 05, 2013

Court Information NCDRC Cases
Judgment Date 05-Sep-2013
Party Details 1. Adarsh Chemicals & Fertilizers Ltd., 2. Dr.Prakash D.Patel Director Adarsh Chemicals & Fertilizers Ltd. Vs United India Insurance Company Ltd.
Case No Original Petition No. 398 of 2000
Judges Mr. J.M. Malik, Presiding Member and Dr. S.M.Kantikar, Member
Advocates For the Complainants: Mr. Anil Nauriya, Advocate With Ms. Sumita Hazarika, Advocate and For the Opposite Party: Mr. P.K. Seth, Advocate
Acts Insurance Act, 1938 - Section 64-UM(2)

Order:

J.M. Malik

1. This complaint was filed before this Commission, on 01.02.1999. The Registry has given wrong number as, 398 of 2000. They are directed to be more careful.

2. This is a unique case, where the Insurance Company contends that report of its Surveyor should be discarded because this witness and his report cannot be said to be guileless. The Insurer were to appoint another Surveyor, but for the reasons best known to them, the needful was not done. Can a party claim the benefit by keeping the facts under the hat or to burry one''s head in the sand .

3. The facts of this case are these. Adarsh Chemicals & Fertilizers Ltd., Udhna, Surat, Gujarat and Dr.Prakash D.Patel, Director of the said Company, complainant Nos. 1 & 2, respectively, filed a claim for Rs.166.07 lakhs, as per the Surveyors report, along with interest @ 18% p.a. They have also claimed consequential losses, including the loss of business to the complainants, in the sum of Rs.60.00 lakhs besides special damages. The complainants obtained insurance policy from the United India Insurance Co.Ltd., the Oppoiste Party, in the sum of RS.22,22,25,000/-. A fire occurred on 16.04.1995, in the reactor of the complainants'' Maleic Anhydride Plant, which gutted the plant and machinery situated in Surat, Gujarat, leading to a major fire loss. The OP was informed telephonically as well as vide letter dated 26.04.1995.

4. In order to produce Malelic Anhydride, a mixture of Benzene and Air, has to be reacted in a shell and tube reactor, in the presence of vandadim pentoxide catalyst. The temperature is controlled through cooling, by circulation on the shell side of fused salt consisting of potassium nitrate, sodium nitrite and sodium nitrate. The technology for producing Maleic Anhydride was licenced from Scientific Design Company Inc., USA.

5. The plant was shut down at about 8.14 hours on 16.04.1995 due to the failure of Gujarat Electricity Board Grid Power Supply on account of tripping of three feeders. The power could not be fully resotred until after 7.00PM. After the re-starting of the reactor, temperature reached high levels and crossed the auto-ignition temperature for the gas mixture which resulted in fire. Due to fire, the entire batch of catalyst was damaged irreversible and non-selectively along with the springs, besides gas mixture and thermocouples. The excessively high temperature generated by fire also brought about change in the microstructures, reactor, tube sheets. The cause of fire was auto-ignition of the gas mixture in the reactor due to rise in temperature caused by continued reaction and the lack of salt circulation, which otherwise could have aided in the removal of heat.

6. The facts of the fire stands confirmed vide Panchanama, dated 29.04.1995, the report dated 24.07.1996 of the Loss Prevention Association of India Ltd., Assessment made by Technical Collaborator, Scientific Design Company Inc., USA, vide their letters dated 23.05.1995, 19.09.1995, 31.07.1996 and 23.09.1996, which confirmed the temperatures at which fire could occur and catalyst would sinter, the comments received from the Indian Institute of Petroleum, Dehradun, Analysis reports received from the Gujarat Industrial Research & Development Agency, Baroda, a Government of Gujarat Organisation, Analysis report dated 17.06.1995 of Electrical Research & Development Association, Vadodara. The Metallographic report, dated June, 1995 of Larsen & Toubro Ltd, Mumbai, confirmed that the tubesheet of the reactor was affected. The data sheets of the Loss Prevention Association of India Ltd. and the technical work on Maleic Anhydride by B.C.Trivedi and E.M.Culbertson, complainant''s Technology Development Centre at Pune, Joint Survey Report, dated 09.12.1996, confirmed the auto-ignition temperatures.

7. The OP refused to accept the survey report. Thereafter, negotiations took place...

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