State Consumer Disputes Redressal Commission
Ch. Narayana Reddy vs The New India Assurance Company Ltd. on 8 May, 2013
BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD. CC 13 of 2008 Between: CH. Narayana Reddy S/o. Ch. Raja Reddy H.No. 4-123, Janmabhoomi Nagar Post: Mancherial, Adilabad Dist. *** Complainant And 1) The New India Assurance Company Ltd. Rep. by its Divisional Manager Old No. 114, New No. 204 Kutchery Road, Mylapore Chennai-4 2) The Divisional Forest Officer (DFO) Bhadrachalam South Bhadrachalam Khammam Dist. 3) The Divisional Forest Officer Mancherial Division Mancherial Adilabad Dist. *** Opposite Parties CC 14 of 2008 Between: K. Prakash Reddy, S/o. K. Mohan Reddy H.No. 4-123, Janmabhoomi Nagar Post: Mancherial, Adilabad Dist. *** Complainant And 1) The New India Assurance Company Ltd. Rep. by its Divisional Manager Old No. 114, New No. 204 Kutchery Road, Mylapore Chennai-4 2) The Divisional Forest Officer (DFO) Bhadrachalam South Bhadrachalam Khammam Dist. 3) The Divisional Forest Officer Mancherial Division Mancherial Adilabad Dist. *** Opposite Parties CC 15 of 2008 Between: K. Prakash Reddy, S/o. K. Mohan Reddy H.No. 4-123, Janmabhoomi Nagar Post: Mancherial, Adilabad Dist. *** Complainant And 1) The New India Assurance Company Ltd. Rep. by its Divisional Manager Old No. 114, New No. 204 Kutchery Road, Mylapore Chennai-4 2) The Divisional Forest Officer (DFO) Bhadrachalam South Bhadrachalam Khammam Dist. 3) The Divisional Forest Officer Mancherial Division Mancherial Adilabad Dist. *** Opposite Parties Counsel for the Complainants: M/s. P. Gopal Das Counsel for the Opposite Parties : M/s. S. Raj Kumar (Op1) G.P. (Ops 2 & 3) CORAM: SMT. M. SHREESHA, PRESIDING MEMBER & SRI S. BHUJANGA RAO, MEMBER WEDNESDAY, THE EIGTH DAY OF MAY TWO THOUSAND THIRTEEN ORAL ORDER:
(Per Smt. M. Shreesha, Member) ***
1) The brief facts as stated in the complaint are that the complainant purchased beedi leaves from A.P. Forest Development Corporation Ltd., by entering into an agreement with Op2 on 13.4.2005, for which Op2 had taken an insurance policy in the complainants account covering the beedi leaves procured and kept in open Khallas for curing and drying purpose against the risks of fire, ACT, storm, tempest, flood and inundation perils with Op1 covering the period from 2.5.2005 to midnight of 1.6.2005. While so, the complainant submits that due to heavy wind rain, gale weather the beedi leaves stored in the open Khallas pertaining to unit No. 14 were damaged. The complainant informed the loss vide telegram dt. 6.5.2005 to Op1 who in turn deputed a surveyors for assessment of loss but did not settle the claim in spite of repeated requests till 11.10.2006. There after the complainant received a letter that Op1 closed the claim on the ground that the damage to beedi leaves due to rain peril is not covered under the policy.
2) The complainant submits that the concerned Thasildhar issued a certificate that between 4.5.2005 and 6.5.2005 due to Bay of Bengal cyclone, gale, storm, cyclonic rains occurred. The surveyor report was not given to the complainant herein.
3) The complainant further submits that he has also executed another agreement with Op3 on 11.3.2005 for unit No. 151 which was also damaged due to cyclonic rain but the Op1 repudiated his claim on the ground that peril due to rain is not covered under the policy. It is the complainants case that unit No. 14 and 151 were totally destroyed, and loss amounts to Rs. 22 lakhs. He has paid premium amounts of Rs. 12,821/-
and Rs. 6,356/- for the policies under coverage but the Ops repudiated the claim without furnishing surveyor report which amounts to deficiency of service and therefore seeks directions to Op1 to pay compensation of Rs. 22 lakhs with interest @ 18% p.a., from the date of loss till the date of realization together with damages of Rs. 5 lakhs and costs of Rs. 30,000/-.
4) The complainants in CC No. 14/2008 and CC No. 15/2008 claim Rs. 20 laksh with interest @ 18% p.a., from the date of loss till the date of realization together with damages of Rs. 6 lakhs and costs of Rs. 20,000/-.
5) The Ops did not choose to contest the matter despite the notice being served on them and this Commission vide order dt. 30.12.2008 allowed the complaints directing the insurance company to pay Rs. 22 laks in CC No. 13/2008 and Rs. 20 lakhs each CC No. 14 and CC No. 15/2008 with interest @ 9% p.a., from the date of repudiation till the date of together with compensation of Rs. 50,000/- and costs of Rs. 5,000/- each. Time for compliance four weeks.
6) Aggrieved by the said order the insurance company Op1 preferred the appeal Nos. 117/2009 to 119 of 2009 before the National Commission and the National Commission imposed consolidated costs of Rs. 30,000/- while giving an opportunity to Op1 to file written statements and directed the State Commission to dispose of all these cases expeditiously.
7) As per the directions of the National Commission an opportunity was given to Op1 to file their written version and affidavit along with their written arguments.
8) The Deputy Manager of Op1 filed his affidavit admitting that the complainant obtained an insurance policy covering the beedies leaves procured and kept in open Khallas for curing and drying purpose against the risk of fire, storm, tempest and inundation for the period from 2.5.2005 to midnight of 1.6.2005. It is also admitted that the complainant informed the said fact with a request to depute a surveyor for the assessment of the loss. Sri Venkatachalam Bhat Wadekar & Co. were deputed as Surveyors who stated in their report that there had been heavy rains accompanied by wind storms at Bhadrachalam area, Rayalaseema and Telangana districts including Hyderabad from 29.4.2005 to 3.5.2005 and that the nature of damage to the leaves is due to exposure to water and observed that the loss is due to rain and not due to flood/inundation. Therefore the Op1 repudiated the claim on the ground that the damage to the beedi leaves was not covered under the policy.
They further contended that the complainant is doing commercial activity and therefore cannot be termed as consumer and that the complaint is barred by limitation and prayed for dismissal of the complaint.
9) The complainant in proof of his case filed his affidavit evidence and Ex. A1 to A26 are marked on his behalf and the Ops filed their affidavit evidence and did not file any documents.
10) The brief point that falls for consideration is whether there is any deficiency in service on the part of Op1 in repudiating the claim and whether the complainants are entitled to the reliefs sought for in the complaints?
11) The facts not in dispute are that the complainant had purchased beedi leaves from Govt. of A.P. Forest Development Corporation Ltd. and executed Ex. A1 agreement on 13.4.2005, 11.3.2005 and 10.3.2005 respectively for unit No. 14 in CC No. 13/2008, unit No. 20 in CC No. 14/2008 and unit No. 16 in CC 15/2008. It is also not in dispute that the value of beedi leaves collected at Collection Centre is covered by insurance policy covering the period from 2.5.2005 till midnight of 1.6.2005 evidenced under Ex. A2. It is also an admitted fact that the complainant made a claim with the Op1 as the beedi leaves were damaged on the intervening night of 6.5.2005 on account of depression in Bay of Bengal which resulted in Cyclone accompanied by heavy winds and rain. Ex. A3 is the telegram dt. 6.5.2005 sent by complainant to Op1 and Exs. A4 to A8 is the correspondence between the complainant and Op1 with respect to settlement of the claim. Ex. A10 is the legal notice got issued by complainant to Op1 claiming the amounts covered under the policy. In spite of several requests the Op1 repudiated the claim vide Ex. A8 dt. 11.10.2006 on the ground that the damage to beedi leaves is due to rains. Peril not covered under the policy. Operating peril has started before the commencement of the policy period.
12) It is Op1s case that the surveyor stated in his report that there were heavy rains accompanied by wind and storm at Badrachalam area, Rayalaseema and Telangana Districts including Hyderabad from 29.4.2005 and this rain continued till 3.5.2005 with a prediction to continue for another day and the loss due to rain is not covered under the policy. A brief perusal of terms and conditions of the policy states under caluse-6 as follows :
VI. STORM, CYCLONE, TYPHOON, TEMPEST, HURRICANE, TORNADO, FLOOD AND INUNDATION:
Loss, destruction, or damage directly caused by storm, cyclone, typhoon, tempest, hurricane, tornado, flood or inundation excluding those resulting from earthquake, volcanic eruption or other convulsions of nature (wherever earthquake cover is given as an add on cover the words excluding those resulting from earthquake, volcanic eruption or other convulsions of nature shall stand deleted.
The complainant filed the certificate given by the Tahasildhar which reads as follows : Exs. A11 to A13.
Ex. A11:
This is to certify that due to Bay of Bengal cyclone gale storms and following cyclone rains occurred w.e.f 4.5.2005 to 6.5.2005 in entire mandal of V.R. Puram of Khammam Dist. the following beedi leave units were washed away from the winds:
1. V. R. Puram (14 unit)
2. Kunduluru (16 unit) Hence certified.
Ex. A12:
This is to certify that due to cyclone in Bay of Bengal and following cyclone rains occurred from 4.5.2005 to 6.5.2005 in the entire mandal of Khammam Dist.
Ex. A13:
This is to certify that due to Bay of Bengal cyclone gale storms and following cyclone rains occurred w.e.f 4.5.2005 to 6.5.2005 in entire mandal of Chintour of Khammam Dist. Name of the beedi leaves units:
1. Chintour
2. Lakkavaram
3. Kunduluru unit Some villages of Chintour mandal). Hence certified.
The aforementioned certificates clearly establish that there was a cyclone and rains occurred between 4.5.2005 and 6.5.2005 and the repudiation by the Op1 that the beedi leaves were damaged due to rain a peril which is not covered under the policy is totally unsustainable.
The definition of cyclone as per the dictionary reads as follows :
A tropical cyclone is a storm system characterized by a low pressure center and numerous thunderstorms that produce strong winds and flooding rain. A tropical cyclone feeds on heat released when moist air rises, resulting in condensation of water vapour contained in the moist air.
13) To construe that cyclone does not include rain and is a separate entity in spite of the fact that the Tahasildhar has given certificates that there was cyclonic rain on account of depression in Bay of Bengal and to repudiate the claim on that ground is unjustified and amounts to deficiency of service.
14) Ops 2 & 3 filed their common written arguments stating that as per clause 5(1) of Ex. A1 agreement that the purchase shall reimburse the collection charges for the leaves collected and recorded in 1A/1B registers and charges are collected irrespective of any loss or damage to the material. This establishes that the complainant has to make his own arrangement for establishment of Khallas, its management, storage, transport of material, watch and ward etc., and submit that there was no deficiency of service on their behalf and seek dismissal of the complaint against them. For the aforementioned reasons we are of the considered view that the CC No. 13/2008, CC No. 14/2008 and CC No. 15/2008 can be allowed in part directing Op1 insurance company to pay Rs. 22 lakhs in CC No. 13/2008 with interest @ 9% p.a., from the date of repudiation till the date of realization together with costs of Rs.
10,000/-. As interest @ 9% had already been awarded by way of damages, we do not think it a fit case to award further compensation. Time for compliance four weeks. The case against Ops 2 & 3 is dismissed but without costs.
15) As a sequel the complaints in CC No.14/2008 and CC No. 15/2008 are allowed in part directing Op1 to pay Rs. 20 lakhs in each of case with interest @ 9% p.a., from the date of repudiation till the date of realization together with costs of Rs. 10,000/ in each of the case. Time for compliance four weeks. The case against Ops 2 & 3 is dismissed but without costs.
1) _______________________________ PRESIDING MEMBER
2) ________________________________ MEMBER C.C. No. 13/2008 APPENDIX OF EVIDENCE WITNESSES EXAMINED FOR COMPLAINANTS OPPOSITE PARTIES None None DOCUMENTS MARKED FOR COMPLAINANT:
Ex.
A1 13.04.2005 Agreement between the complainant and Op2 Ex. A2 02.05.2005 Policy obtained by Op2 in the A/c. of the complainant from Op1 for Rs. 60 lakhs.
Ex. A3 06.05.2005 Express telegram issued by complainant to Op1 informing damage to beedi leaves due to Cyclone.
Ex. A4 20.06.2005 Letter of complainant to Op1 to inform the status of his claim.
Ex. A5 16.07.2005 Letter of complainant to S. Venkatachalam Bhatawadekar & Company enclosing the necessary data sought by them.
Ex. A6 18.07.2005 Reminder issued by complainant to Op1 to inform the status of his claim.
Ex. A7 31.10.2005 Letter of complainant to S. Venkatachalam Bhatawadekar & Company requesting to complete the assessment at the earliest.
Ex. A8 11.10.2006 Repudiation letter issued by Op1 closing the file as the peril is not covered under the policy.
Ex. A9 04.09.2006 Reminder issued by complainant to Op1 with a request to settle the claim at the earliest.
Ex.
A10 29.11.2006 Letter of complainant to Op1 to settle his claim as there was no rain at the time of taking the policy and damage caused to beedi leaves was due to cyclonic rains.
Ex.
A11 08.06.2007 Certificate issued by the Tahsildhar, Vararamachandrapurm confirming cyclonic rains during 4.5.2005 to 6.5.2005 in the entire mandal of V. R. Puram.
Ex.
A12 15.06.2007 Certificate issued by Tahsildhar, Aswapuram Certifying cyclonic rains occurred from 4.5.2005 to 6.5.2005 in Khammam Dist.
Ex.
A13 07.06.2007 Certificate issued by Tahasildhar, Chintur Certifying that cyclonic rains occurred w.e.f.
4.5.2005 to 6.5.2005 in Chintur Mandal of Khammam Dist.C.C. No. 14/2008
DOCUMENTS MARKED FOR COMPLAINANT:
Ex.
A1 11.03.2005 Agreement between the complainant and Op2 Ex. A2 02.05.2005 Policy obtained by Op2 in the A/c. of complainant from Op1 for Rs. 60 lakhs.
Ex. A3 06.05.2005 Express telegram issued by complainant to Op1 informing damage to beedi leaves due to Cyclone.
Ex. A4 20.06.2005 Letter of complainant to Op1 to inform the status of his claim.
Ex. A5 16.07.2005 Letter of complainant to S. Venkatachalam Bhatawadekar & Company enclosing the necessary data sought by them.
Ex. A6 18.07.2005 Reminder issued by complainant to Op1 to inform the status of his claim.
Ex. A7 31.10.2005 Letter of complainant to S. Venkatachalam Bhatawadekar & Company requesting to Complete the assessment at the earliest.
Ex. A8 23.01.2006 Letter of complainant to S. Venkatachalam Bhatawadekar & Company enclosing certain documents sought by them and requested to finalise the claim Ex. A9 03.10.2006 Repudiation letter issued by Op1 closing the file as the peril is not covered under the policy.
Ex.
A10 29.11.2006 Letter of complainant to Op1 to settle his claim as there was no reply to his earlier letters.
Ex.
A11 08.06.2007 Certificate issued by the Tahsildhar, Vararamachandrapurm confirming cyclonic rains during 4.5.2005 to 6.5.2005 in the entire mandal of V. R. Puram.
Ex.
A12 15.06.2007 Certificate issued by Tahsildhar, Aswapuram Certifying cyclonic rains occurred from 4.5.2005 to 6.5.2005 in Khammam Dist.
Ex.
A13 07.06.2007 Certificate issued by Tahasildhar, Chintur Certifying that cyclonic rains occurred w.e.f.
4.5.2005 to 6.5.2005 in Chintur Mandal of Khammam Dist.C.C. No. 15/2008
DOCUMENTS MARKED FOR COMPLAINANT:
Ex.
A1 10.03.2005 Agreement between the complainant and Op2 Ex. A2 02.05.2005 Policy obtained by Op2 in the A/c. of complainant from Op1 for Rs. 60 lakhs.
Ex. A3 06.05.2005 Express telegram issued by complainant to Op1 informing damage to beedi leaves due to Cyclone.
Ex. A4 20.06.2005 Letter of complainant to Op1 to inform the status of his claim.
Ex. A5 16.07.2005 Letter of complainant to S. Venkatachalam Bhatawadekar & Company enclosing the necessary data sought by them.
Ex. A6 18.07.2005 Reminder issued by complainant to Op1 to inform the status of his claim.
Ex. A7 31.10.2005 Letter of complainant to S. Venkatachalam Bhatawadekar & Company requesting to Complete the assessment at the earliest.
Ex. A8 23.01.2006 Letter of complainant to S. Venkatachalam Bhatawadekar & Company enclosing certain documents sought by them and requested to finalise the claim Ex. A9 03.10.2006 Repudiation letter issued by Op1 closing the file as the peril is not covered under the policy.
Ex. A10 18.10.2006 Letter of complainant to Op1 informing that there was no rain at the time of taking the policy and damage to beedi leaves was due to cyclonic rains and requested to settle the claim at the earliest.
Ex.
A11 29.11.2006 Letter of complainant to Op1 to settle his claim as there was no reply to his earlier letters.
Ex.
A12 08.06.2007 Certificate issued by the Tahsildhar, Vararamachandrapurm confirming cyclonic rains during 4.5.2005 to 6.5.2005 in the entire mandal of V. R. Puram.
Ex.
A13 15.06.2007 Certificate issued by Tahsildhar, Aswapuram Certifying cyclonic rains occurred from 4.5.2005 to 6.5.2005 in Khammam Dist.
Ex.
A14 07.06.2007 Certificate issued by Tahasildhar, Chintur Certifying that cyclonic rains occurred w.e.f.
4.5.2005 to 6.5.2005 in Chintur Mandal of Khammam Dist.
1) _______________________________ PRESIDING MEMBER
2) ________________________________ MEMBER *pnr UP LOAD O.K.