State Consumer Disputes Redressal Commission
M/S. Parvathi Buiilders vs 1.The Manager, Oriental Insurance Co. ... on 3 August, 2023
1
BEFORE THE TELANGANA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION : HYDERABAD.
FA.NO. 201 OF 2020
AGAINST ORDERS IN CC.NO. 211 OF 2014, DISTRICT
CONSUMER COMMISSION-III, HYDERABAD.
Between:
M/s Parvathi Builders,
Represented by its Managing Partner
Kollu Ravindrababu,
S/o Venkaiah,
Aged about 45 years,
Occupation : Business,
R/o Plot No.239-A,
HIG Phase-2, Ushodaya Enclave,
Madeenaguda,
Hyderabad -500 049.
....Appellant/Complainant
And:
1.The Manager, Oriental Insurance Company Ltd., Claims Service Center, H.No.6-1-349, Naivedyam Hotel Lane, Padmarao Nagar, Secunderabad-500 025.
2. Sri L.Vijayababu, Insurance Surveyor, Plot No.17, Flat No.202, Sri Sairam Classic, Siddarthnagar, Vengalrao Nagar, Hyderabad-500 038.
3. Sri Ritesh Naredi, S/o Late Ajay Kumar Naredi.
Aged about 44 years, Occupation : Business, Resident of H.No.6-2-670, Chintalbasti, Hyderabad, Presently residing in H.No.8-2-310/A/5, Road No.14, Nandi Nagar, Banjara Hills, Hyderabad -500 034.
4. Smt. Kanta Naredi, W/o Late Ajay Kumar Naredi, Aged about 65 years, Occupation : House Wife, Resident of H.No.6-2-670, Chintalbasti, Hyderabad, Presently residing in H.No.8-2-310/A/5, Road No.14, Nandi Nagar, Banjara Hills, Hyderabad -500 034.
25. Smt.P.Vijaya Rani, W/o Late P.Chandra Sekhar, Aged about 62 years, Occupation : House Wife, Resident of H.No.11-10-97/2, Road No.5, Kalkinagar, SBI Colony, Kothapet, Hyderabad -500 035.
.....Respondents/Opposite Parties Counsel for the Appellant/Complainant: Party-in-person.
Counsel for the Respondent No.1/Opposite Party No.1:
Sri S. Pramod Kumar Counsel for the Respondent No.2 to 5/Opposite Party No.2 to 5:
Called Absent.
QUORAM:
HON'BLE SMT.MEENA RAMANATHAN, IN-CHARGE PRESIDENT & HON'BLE SRI K.RANGA RAO, MEMBER-JUDICIAL THURSDAY, THE 03rd DAY OF AUGUST TWO THOUSAND TWENTY THREE ******* Order : (Per HON'BLE SRI K.RANGA RAO, MEMBER-JUDICIAL)
1. This is the appeal filed U/s.15 of Consumer Protection Act,1986, praying this Commission to set aside the order dated 27.01.2020 passed by the District Consumer Commission-III, Hyderabad in C.C.No.211/2014 as the same is arbitrary, illegal and contrary to the provisions of the C.P.Act. and direct the Respondent No.1/Opposite Party No.1 to pay the claim amount of Rs.1,48,100/- with 12% interest from the date of claim along with compensation of Rs.50,000/- for causing harassment to the Appellant for last 6 years and Rs.2,000/- towards the cost of the petition or any order which this Commission deem fit and necessary.3
2. For the sake of convenience, the parties are described as arrayed in the complaint.
3. Briefly stated, the facts are that the Appellant/Complainant entered into a Development Agreement cum General Power of Attorney with the opposite party No.3 to 5 for construction of commercial Complex in plot No.s 11, 12, 13 and 14 in Survey No.222, Part, Madeenaguda (Village), Serilingapally Mandal, Ranga Reddy District and also obtained Contractor‟s All Risks Policy No.433702/44/2013/1293 for the period from 18.03.2013 to 17.03.2016 , in the name of Opposite Party No.3 and others, by paying Rs.14,000/- (Rupees fourteen thousand only) towards premium amount. On 25.10.2013, the retaining walls on the construction site were damaged due to heavy rains and the same was informed to the opposite party No.1 on phone, email and by way of letter dated 28.10.2023. On the next day, the opposite party No.2 Surveyor inspected the site, but, the complainant did not get any claim amount of Rs.1,48,100/- though reminded them several times. He suffered harassment and mental agony due to the acts of the opposite parties. Hence, the complaint.
4. The Respondent No.1/Opposite Party No.1 filed written version resisting the complaint filed by the Appellant/Complainant. The cause of action arose outside the territorial jurisdiction of this Forum and that the complainant is not the policy holder and he has no locus standi to file the complaint and there is no material evidence to show that the retaining walls on the construction site were damaged. The Respondent No.1/Opposite Party No.1 filed additional written version reiterating its earlier version and contended that the complainant has opted for STFI (Storm, Tempest, Floor and Inundation) coverage by paying additional premium and as such have not claimed any amount from the opposite party No.1 and stated that the Appellant/Complainant does not have "insurable interest", as such this complaint is liable to be dismissed.4
5. Before the District Commission, the Appellant/Complainant filed evidence affidavit and marked Ex.A1 to A12 on his behalf.
Evidence affidavit of Respondent No.1/Opposite Party No.1 filed and marked Ex.B1 to B5 on their behalf.
6. The District Commission after hearing and considering the material on record dismissed the complaint, with no costs.
7. Aggrieved by the said order of the District Commission, the Appellant/Complainant filed the appeal bearing FA.No.201/2020 contending that the Commission below had failed to consider the following:
That the District Commission is contrary to the provision of the Consumer Protection Act, weight of evidence and probabilities of the matter before it.
That the District Commission below erred in framing issues as jurisdiction of the complaint was decided by the State Commission already.
That the Commission below erred in brushing aside the entire evidence led by the appellant to clinically prove the locus standi as per Section 2(d) of the Consumer Protection Act.
That the Commission below grossly erred in not allowing the counsel for Respondent/Opposite Party No.5 to file vakalat and adoption memo on 03.01.2020 by assuming that the Respondent No.5 was set exparte which is incurred. That the Commission below grossly erred in observing the goal of a Contractor All Risks Insurance Policy is to ensure all parties are covered on the project, regardless of the type of damage to the property.
That the Commission below grossly erred in losing sight of the fact of the case pleaded.
That the Commission below failed to form an opinion regarding verification of signatures on Ex.B3 in the judgment though IA No.146/2019 of Respondent No.1 was allowed to mark as Ex.B3 on a condition.5
That the Commission below grossly erred in being unreasonably sympathetic towards the Respondent /Opposite Party No.1 as can be seen from paragraph 2 in 6th page of the judgement and citing irrelevant judgment of Satwant Singh vs United India Insurance Co., Ltd. That the Commission below has totally brushes aside order in the case of Consumer Education & Research Society & Anr. Vs New India Assurance Co., Ltd., & Ors [I (2008) CPJ 317 (NC).
That the Commission below ought to have considered the appellant as subrogee as the appellant had reconstructed the fallen retaining walls by spending their amount of Rs.1,48,100/-.
8. The Respondent No.2 to 5/Opposite Party No.2 to 5 were called absent though notices served satisfactorily.
9. The point that arises for consideration is whether the impugned order as passed by the District Commission suffers from any error or irregularity or whether it is liable to be set aside, modified or interfered with, in any manner? To what relief?
10. Heard arguments of both sides.
11. To decide the point for consideration, clarity is required to be given to certain rudimentary aspects such as whether the appellant/complainant is a „Consumer‟ as per section 2(d) of Consumer Protection Act, 1986 as he filed the complaint under section 12 of the Consumer Protection Act, 1986. We are extracting below section 2(d) of C.P.Act, 1986 for ready reference:-
Section 2(d) "Consumer" means any person who - (i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment whn such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any 6 commercial purpose, or (ii) (hires or avails of) any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who (hires or avails of) the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person (but does not include a person who avails of such services for any commercial purpose). {Explanation:- For the purposes of this clause, "Commercial purpose" does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment)
12. It is vehement submission of the appellant/complainant that he is a beneficiary as mentioned in Section 2(d) of C.P.Act, 1986 and moreover, he is also party to Contractors All Risk Insurance Policy and further he is representing Respondents No.3 to 5 as they have entered into an Development Agreement cum irrevocable General Power of Attorney, which was executed on 11.04.2005, as such he is authorized by them to file the complaint before the District Commission against OP No.1 Insurance Company and other opposite parties are formal parties as he is not making any reliefs against them except Opposite Party No.1. For the same, he places reliance on Ex.A10 which is copy of Development Agreement cum Irrevocable General Power of Attorney. At this juncture, it is to be made clear that opposite parties No.3 to 5 are the land owners of vacant plot bearing No.11 & 14 in Survey No.222, admeasuring 563 sq. yards or 470 sq. mts., vacant plot bearing No.13 in Survey No.222 admeasuring 376 sq. yards or 314.33 sq. mts., vacant plot bearing No.12 in Survey No.222, admeasuring 318 sq. yards or 265.84 sq.mts. and the said plots are situated at Madinaguda Village, Serilingampally Mandal and Municipality, Ranga Reddy District, respectively, by virtue of the registered sale deeds vide documents No.s‟ 6707/1991, 6708/1991, 6709/1991 respectively.
713. We have carefully examined Ex.A10 Development Agreement cum Irrevocable General Power of Attorney and the same shows that opposite parties 3 to 5 have entered into the Development Agreement cum Irrevocable General Power of Attorney with the complainant and registered the said Development Agreement cum Irrevocable General Power of Attorney, bearing No.4817 of 2005 dated 11.04.2005, registered at Registrar Office of Ranga Reddy District in respect of property plots bearing No.s‟ 11,12, 13 & 14 in survey No.222 Part, situated at Madinaguda Village, Serilingampally Mandal, Ranga Reddy District, for developing the said scheduled property into a commercial complex. It was agreed between opposite parties 3 to 5 and the appellant/complainant to share the constructed area at the ratio of 51% to the developer (complainant) and 49% to the owner (OPs 3 to 5). It is categorically mentioned in the said Development Agreement cum Irrevocable General Power of Attorney, that an extent of 641 sq. yards is the 51% of share out of 1257 sq. yards and the remaining 616 sq. yards is 49% share. The complainant being the developer has to raise the construction of the commercial complex. The schedule of the property which is to be developed by the complainant is also mentioned in Ex.A10 Development Agreement cum Irrevocable General Power of Attorney. In point 22.d at Page 6 of Ex.A10, opposite parties 3 to 5 gave power of attorney to the appellant to institute, sign, file suits, petitions, appeals, writs or any other legal proceedings in respect of the scheduled mentioned property and to defend the principal, in all courts, quasi-judicial authority, civil and criminal or in the High Court or in the Supreme Court of India and to sign and verify all applications, affidavits, appeals, petitions, vakalats, etc., from time to time and to give evidence in the court of law on behalf of the principal and to effect compromise in all such legal proceedings.
14. It is the further submission of the complainant that by virtue of Ex.A10 Development Agreement cum Irrevocable General Power of Attorney, he and opposite parties No.3 to 5 had taken Contractors All Risks Policy No.433702/44/2013/1293 for the 8 period from 18.03.2013 to 17.03.2016 from opposite party No.1 for proposed construction of commercial complex in plot No.s‟ 11 to 14, Survey No.222 Part, Madinaguda village, Serilingampally Mandal, GHMC, Hyderabad -500 049. The said policy was taken in the name of Ritesh Naredi, (Opposite Party No.3) and others. He is also beneficiary under the said policy. It is the further contention of the complainant that the said policy itself, says that it is a Contractors Risks Policy for developer not for land owners as such, he paid Rs.14,000/- from his Bank Account by way of cheque No.2, dated 14.03.2013 drawn on Bank of India, Miyapur Branch, Hyderabad.
15. We have also scrupulously examined Ex.A1 the copy of Contractors All Risks Insurance Policy and the same was given by OP No.1 insurance Company in the name of Ritesh Naredi and others for the proposed construction of commercial complex i.e. schedule of the property mentioned in Ex.A10 Development Agreement cum Irrevocable General Power of Attorney. At this juncture, it is germane to mention that the complainant got marked his Statement of his Account for the period from 03.11.2012 to 07.05.2013 as Ex.A12. A perusal of the said Ex.A12 reveals that an amount of Rs.14,000/- was debited from the account of the complainant on 20.03.2013, which was payable to the opposite party No.1 towards premium of Ex.A1 policy. Admittedly, the land owners Opposite parties No.3 to 5 entered into Ex.A10 with the complainant for the development of their land into a commercial complex and their shares also in the constructed area are clearly specified in Ex.A10, the details of which mentioned in our aforestated discussion and further admittedly, Ex.A1 policy is taken for the proposed construction of the commercial complex in which the interest of the complainant and the Opposite Parties No. 3 to 5 lie. In the context of above facts, particularly in the backdrop of Ex.A10 it can be inferred and concluded that the complainant is also a beneficiary under Ex.A1 policy. If Opposite Party No.1 Insurance Company wants to avoid the claim made by the complainant under the camouflage that Ex.A1 policy was not 9 taken in the name of the complainant, it ought to have mentioned the names of all persons in whose favour Ex.A1 policy was given. But, it gave Ex.A1 policy in the name of Ritesh Naredi (OP No.3) and others, not specifying as to who are the said others. Having gone through the order dated 27.01.2022 passed in CC No.211/2014 by the District Commission-III, Hyderabad, we are of considered opinion that the District Commission-III, Hyderabad has grossly erred in appreciating the above aspect in the backdrop of Ex.A10 and Ex.A1. From our aforestated discussion, we make it clear that the complainant falls under the definition of "Consumer" and he is a beneficiary under Ex.A1 policy and for the deficiency of Opposite party No.1, he is entitled to file the complaint.
16. It is the main case of the complainant as per his complaint and evidence that on 25.10.2013 at 9:00 P.M., due to heavy rains in Hyderabad, the retaining walls East and West sides of the scheduled site were fallen down and he informed the same to the opposite party No.1 over phone, email and through Ex.A4 letter, dated 28.10.2013 upon which opposite party No.2 who is the official surveyor of OP No.1 Insurance Company had inspected the complainant‟s site on 29.10.2013. Then he sent the required documents and estimation of damage or loss to process their claim through Ex.A5 letter, dated 30.10.2013. But, he did not get claim amount of Rs.1,48,100/- . He personally reminded Opposite parties No.1 & 2 on 02.12.2013 and 11.12.2013 in their office and through letters under Ex.A6 & Ex.A7 dated 12.11.2013 and 14.12.2013 respectively, apart, from several emails and telephone calls which proved to be flogging the dead horse. So, he sent notice dated 17.02.2014 to opposite parties No.1 & 2 asking them to pay the claim amount within 15 days. But, Opposite Parties No.1 & 2 did not respond to the said notice. He made surveyor as Opposite Party No.2 as whenever, he asked Opposite Party No.1 about status of the claim, Opposite Party No.1 informed him that Opposite Party No.2 did not send the report to Opposite Party No.1. Hence, he knocked the doors of the learned District Commission- III, Hyderabad for redressal of his grievance as non-payment of the 10 claim by Opposite Party No.1 amounts to deficiency of service, for grant of reliefs mentioned by him in his complaint.
17. Per contra, it is the retaliating contention of Opposite Party No.1 that the complainant is not the policy holder and he has no locus standi to file the complaint and there is no material evidence to show that walls on the construction site were damaged and further the claim of the complainant falls within policy excess as such, they repudiated the claim of the complainant.
18. In our initial discussion, we have clarified that the complainant is a "Consumer" and he is also a beneficiary under Ex.A1 policy as such he has locust standi to file the complaint against OP No.1 for the deficiency of service on the part of the OP No.1. The complainant filed his evidence affidavit reiterating his case mentioned in his complaint. He also got marked Ex.A1 to A12 in support of his claim. Similarly, the Senior Divisional Manger of OP No.1 was examined as DW1 and Ex.B1 to B5 were marked on behalf of the OP No.1.
19. It is not in dispute that Ex.A1 policy was taken for the proposed construction of the commercial complex of the scheduled property mentioned in Ex.A10 Development Agreement cum Irrevocable General Power of Attorney. It is also not in dispute that complainant as the builder and Ops 3 to 5 as the owners of the scheduled land have their property rights in the proposed construction of the commercial complex. It is a matter of common sense that when Ex.A1 policy was taken for the proposed construction, by virtue of Ex.A10 the complainant as well as Ops NO.1 to 3 are the beneficiaries of the Ex.A1 policy. The period of coverage of insurance under Ex.A1 policy was from 18.03.2013 to 17.03.2016. Ex.B2 is the copy of the Surveyor Report, dated 15.02.2014. A perusal of Ex.B2 Surveyor Report, shows that the same was submitted by the Opposite party No.2, the official surveyor of OP No.1 Insurance Company. It is mentioned in Ex.B2 surveyor report that Opposite Party No.2 under the instructions of OP 1 inspected the construction site on 29.10.2013. Under the 11 head "details of survey" in Ex.B2, date 25.10.2013 at about 9:00 P.M. was mentioned against the column "date when the loss took place". Under the head "cause of loss", the Surveyor, mentioned that "as per the information gathered from the insured representative and his physical inspection of the construction site, the builder (complainant) has started the construction work by making earth work for the cellar, by putting the retaining walls on all sides of the cellar with granite stones. On 25.10.2013 there were heavy rains in that area, at about 9:00 P.M., in the night, suddenly the retaining walls on east and west sides were collapsed after the construction took place, the size of the wall on east side is 62X12 and on the west side is 38X11; this happened due to heavy rain on that day, the collapsed cannot be in the usable stage and needs all the material to be removed and needs to be re-built of the retaining walls.
20. Under the head "Details of damages" in Ex.B2, it is mentioned retaining walls have collapsed- east side 62X12, west side 38X11- to be replaced.
21. Under the head "Estimation" it Ex.B2 it is mentioned "the insured has given the repair estimates for a sum of Rs.1,67,900/- from M/s Parvathi Builders, Madinaguda, Hyderabad, vide quotation, dated 30.10.2013 excluding debris recovered from the site".
22. Under the head "Assessment of loss" the particulars of the damage caused to the east side and west side retaining walls mentioned to the effect the total damaged area of the wall is - 1466+779= 2,245 cft. @ Rs.70/-, which comes to an amount of Rs.1,57,150/- to which a sum of Rs.9,150/- towards the debris removal charges (JCB) and a further sum of Rs.1,600/- towards labour charges for cleaning debris added and the total comes to Rs.1,67,900/-.
23. Under the head „"Salvage" in Ex.B2 it is mentioned that "the salvage value for the recovered granites from the debris 1800 in number and costs of each stone is Rs.11/- and the total value for 12 granites (1800X11) is 19,800/- towards salvage value, which is fair and reasonable. The assessed loss was estimated yet Rs.1,67,900- 19,800 = Rs.1,48,100/-.
24. As seen from the material borne by the record, the damage of retaining walls which was on 25.10.2013 was during the existence of Ex.A1 policy. The said damage does not fall under the exclusion Clauses of Ex.A1 policy and the same is under the Insurance coverage of Ex.A1 as such, having issued Ex.A1 insurance policy to the project site, OP No.1 is estopped to repudiate the claim of the complainant on the untenable ground that the claim falls within excess. The Insurance Coverage under Ex.A1 policy for the subject site is for an amount of Rs.70,00,000/-. The complainant made a reasonable claim as seen from the surveyor report and the denial/repudiation of the same by Opposite No.1, in our considered opinion amounts to deficiency of service, for which the complainant is entitled for reasonable compensation, costs along with the claim amount.
25. In the result, the appeal is allowed and the impugned order dated 27.01.2020 passed in CC 211/2014 by the District Commission-III, Hyderabad is set aside and the complaint of the complainant is allowed as prayed for, but with slight reduction in the rate of interest i.e. Opposite Party No.1 is directed to pay the claim amount of Rs.1,48,100/- (Rupees one lakh forty eight thousand and one hundred only) with interest at 9% per annum from 15.02.2014 i.e. the date of Surveyor Report and also to pay a sum of Rs.50,000/- (Rupees fifty thousand only) towards compensation for the harassment and mental agony suffered by the complainant and also to pay the costs of Rs.2,000/-(Rupees two thousand only). Time for compliance is four weeks from the date of the receipt of the order copy in this appeal. Accordingly, the appeal is disposed of.result, the appeal filed Sd/- Sd/-
I/C PRESIDENT MEMBER-J
Dt: 03.08.2023
AD*