State Consumer Disputes Redressal Commission
Kusum Devi Agrawal & Anr. vs S.B.I.General Insurance Co.Ltd. & Anr. on 1 March, 2017
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION,
PANDRI, RAIPUR (C.G.)
Complaint Case No.CC/2016/38
Instituted on : 27.08.2016
1. Kusum Devi Agrawal, Aged 73 years,
W/o Shri Sagar Agrawal,
Gharghora Road, Near Kirodimal Chowk,
Raigarh (C.G.)
2. K. Kusum Auto India Pvt. Ltd.
Through : Director Kusum Devi Agrawal,
W/o Shri Sagar Agrawal,
Dhimrapur Chowk,
Raigrh (C.G.) ... Complainants/Applicants
Vs.
1. S.B.I. General Insurance Company Limited,
Natraj - 101, 201 & 301,
Junction of Western Express Highway,
Andheri Kurla Road, Andheri East,
Mumbai - 400069
2. State Bank of India,
Main Branch, Raigarh,
District Raigarh (C.G.) - 496001 .. OPs/ Respondents/Non Applicants
PRESENT: -
HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT
HON'BLE SHRI D.K. PODDAR, MEMBER
HON'BLE SHRI NARENDRA GUPTA, MEMBER
COUNSEL FOR THE PARTIES:
Shri Mukesh Sharma, Advocate for the complainant.
None for the O.P. No.1.
Shri Rajesh Tiwari, Advocate for the O.P. No.2.
ORDER
Dated : 01/03/2017 PER :- HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT. The complainant filed this consumer complaint under Section 12 r/w Section 17 of the Consumer Protection Act, 1986 against the OPs seeking total compensation of Rs.54,46,018/- along with interest, // 2 // compensation cost and expenses deemed fit by the Hon'ble Commission.
2. Briefly stated the facts of the complaint of the complainants are that the complainant No.1 is resident of Raigarh, residing at the address mentioned in the cause title of complaint having its property situated as Dhimrapur Chowk, Raigarh in sheet No.06, Plot No.52/8, 54/7, 55/7, 56/8 admeasuring 0.085 hectare = 9180 square feet which has been leased to K. Kusum Auto Pvt. Ltd., Raigarh Pvt. Ltd, Raigarh. The complainant No.1 is the director of K. Kusum Auto Ltd. (complainant No.2). In the premises leased by the complainant No.1, the lessee is carrying out business in the name and style K. Kusum Auto Pvt. Ltd., which is engaged and sales and repairs of Suzuki two wheelers at Raigarh (Chhattisgarh). To secure her assets and premises, the complainant No.1 got insured the premises with O.P. No.1 for sum assured Rs.50,00,000/- and obtained Standard Fire and Special Perils Policy, which was effective for the period from 03.03.2013 to 01.03.2014. There was an incident of flood and inundation in the month of July, 2013 and the premises of the complainant No.1 was completely damaged due to flood and inundation. The matter was reported to the O.P. No.1. The O.P. No.1 appointed Surveyor Shri B.K. Agrawal & Associates for assessment of loss and he inspected the premises. Meeting of the representative of the complainant No.1 and O.P. No.1 and Surveyor was conveyed. The complainant No.1 // 3 // submitted bills of repairs and construction works, which were carried out at the premises, to the Surveyors, and requested the O.P. No.1 to settle the claim, but the same has been declined by the O.P.No.1. The repudiation made by the insurer is in contravention t the provisions of Transfer of Property Act holding that complainant has no insurable interest in the property. The Insurance Company has raised illegal grounds amount to deficiency in service on the part of the insurer. The O.P. No.2 has been made a party on account of their interest involved in providing finance for the business carrying out in the premises. The O.P. No.1 has repudiated the claim on wrong footing that the premises has been capitalized in the account of lessee. The property still stands in the name of the complainant No.1 which shows that complete benefit of the property which was insured under disputed property have not been transferred and interest of the complainant No.1 in the property still survives. The complainant No.1 has to make an expenditure of Rs.31,11,250/- towards restoration, Rs.56,065/- in electricity fittings, Rs.68,819/- towards furniture, Rs.73,000/- in painting and Rs.3,01,718/- in aluminium partition. Total partition incurred in restoration in other carried out amounts to Rs.50,46,018/- for which claim was submitted to the insurer for reimbursement which has been denied by the insurer vide repudiation letter dated 30.07.2015.The insurance policy was issued to the claimant on account of details submitted by her and premium was paid by her, no similar // 4 // policy was issued by any other insurer to any other person for the claim raised by the complainant no.1 for the losses suffered for restoration of premises. The O.P. (Insurance Company) by adopting dilatory practice has repudiated the claim of the complainant vide repudiation letter dated 30.07.2015 claiming that the claim was not covered under the insurance policy. Hence, the complainant filed the instant complaint and prayed for granting relief as mentioned in the complaint.
3. None appeared for the O.P. No.1 inspite of service, therefore, the O.P. No.1 did not file written statement and documents.
4. The O.P. No.2 filed its written statement and averred that no such document in relation to title of mentioned sheet No.06, plot/khasra No.52/8, 54/7, 55/7, 56/8 admeasuring 0.085 hect., / 9180 Sqft., which has been leased to Kusum Auto Pvt. Ltd. To ensure its liability the complainant no.1 got her premises and assets insured under insurance policy worth Rs.50,00,000/- issued by O.P. No.1 is also not having any relation to O.P. No.2. The incident of flood and inundation in month of July, 2013 or incidence report to the Insurance Company as claim No.89092 and requested for settlement of claim was made to O.P. No.1 does not having any relation to O.P. No.2. On happening of incident, complainant's representatives had meeting with the Insurance Company and Surveyors and submitted bills for repairs and construction carried out at the premises and submitted it to // 5 // O.P. No.1 for reimbursement but the same has been declined vide letter dated 30.07.2015, and further clause No. I to iv also does not having any relation to O.P. No.2. The repudiation made by the insurer is in contravention to the provisions of Transfer of Property Act holding that complainant No.1 has no insurable interest in the property. The Insurance Company has raised illegal grounds amounting to deficiency in service on part of insurance co., also does not having any relation to O.P. No.2 . The O.P. No.2 has been made party on account of their interest involved in providing finance for carrying business is acceptable with further right for recovery and vice versa. The O.P. No.1 has repudiated the claim on wrong footing that the premises has been capitalized in the account of lessee. It is pertinent to note that the property still stand in the name of the complainant no.1, also does not having any relation to the O.P. No.2.The complainant has to made expenditure of Rs.31,11,250/- towards restoration, , Rs.56,065/- n electricity fitting, Rs.68,819/- towards furniture, Rs.73,000/- in painting, Rs.3,01,718/- in aluminium partition, total partition incurred in restoration in other carried out amounts to Rs.50,46,018/- for which claim has been denied by the insurer etc. also does not having any relation to O.P. No.2. The insurance was issued to the complainant on account of details submitted by her and premium was paid by her. No similar policy was issued by any other insurer to any other person for the claim // 6 // raised by the complainant No.1 for the loss suffered for restoration of premises, also does not having any relation to O.P. No.2. The insurance company by adopting dilatory practice has repudiated the claim of the complainant No.1 vide letter dated 30.07.2015 claiming that the claim was not covered under policy condition, does not having any relation to the O.P. No.2. The complainant it is liable to be dismissed against the O.P. No.2.
5. The complainant has filed documents. Document No.1 is Standard Fire and Special Perils Policy, document No.2 is letter dated 30.07.2015 sent by the O.P. No.1 to M/s Kusum Devi Agrawal, document No.3 are registered notice dated 24.07.2015 sent by Shri Sudhanshu Guru, Advocate to the S.B.I. General Insurance Co. Ltd., S.B.I. Main Branch, Raipur and Surveyor of S.B.I. General Insurance Co. Ltd., postal receipts, document No.4 is bill dated 14.08.2014 issued by S.K. Enterprises, document No.5 is Tax Invoice issued by Agrawal Plywood, document No.6 is Tax Invoice issued by Shri Furniture, Bill document No.7 is bill dated 20.08.2014 issued by Bharat Electrical, document No.8 is Agreement for the boundary wall and drainage and repairing work, document No.9 is bill dated 15.09.2014 issued by M/s Barkha Agrawal, document No.10 is photographs.
6. The OPs have not filed any documents.
// 7 //
7. Shri Mukesh Sharma, learned counsel appearing for the complainants has argued that the complainant No.1 is residing at Gharghora Road, Near Kirodimal Chowk, Raigarh and she is owner of property situated in Sheet No.06, Plot No.52/8, 54/7, 55/7, 56/8 admeasuring 0.085 hectare - 9180 square feet, which has been leased out to K. Kusum Auto Pvt. Ltd. (complainant No.2). The complainant No.1 is also a director of K. Kusum Auto Pvt. Ltd. and she is carrying out business in the name and style K. Kusum Auto Pvt. Ltd., which is engaged in sales and repairs of Suzuki two wheelers at Raigarh (C.G.). The above premises and assets are insured with the O.P. No.1. The sum assured is Rs.50,00,000/-. The complainants deposited the premium with the O.P. No.1, as mentioned in the insurance policy. The complainant No.1 has make an expenditure of Rs.31,11,250/- towards restoration, Rs.56,065/ in electricity fitting, Rs.68,819/- towards furniture, Rs.73,000/- in paining and Rs.3,01,718/- in aluminium partition. The complainant No.1 spent near about Rs.50,46,018/-. In the month of July, 2013, the incident of flood and inundation was occurred, due to which building and assets, were completely damaged. The complainant No.1 submitted her claim along with relevant documents before the O.P. No.1. The O.P. No.1 appointed Shri B.K. Agrawal & Associates as Surveyors for assessment of loss suffered by the complainant No.1 at her premises due to flood, but the O.P. No.1 did not allow the claim of the complainant No.1 and // 8 // repudiated her claim on baseless ground and thus committed deficiency in service and unfair trade practice, therefore, the complainants are entitled to get Rs.54,46,018/- along with interest from the O.P. No.1. The complaint may be allowed and the reliefs as prayed in the complaint be allowed. He placed reliance on M/s. Escorts JCB Ltd. Vs. Commissioner of Central Excise, Delhi - II, 2002 (7) Supreme 368.
8. None appeared for the O.P. No.1 before us on 15.02.2017 when the case is fixed for final arguments.
9. Shri Rajesh Tiwari, learned counsel appearing for the O.P. No.2 has argued that the O.P. No.2 (Bank) is only a formal party and the complainants have claim reliefs from the O.P. No.2. The dispute is between the complainants and the O.P. No.1 and the O.P. No.2 is not having any concern with it. The complaint is liable to be dismissed against the O.P. No.2.
10. We have heard Shri Mukesh Sharma and Shri Rajesh Tiwari, learned counsel appearing for the complainants and O.P. No.2 respectively and perused the documents filed by the complainant in the complaint.
11. The complainants have filed Policy Schedule of Standard Fire And Special Perils Insurance Policy. In the insurance policy the name of the insured is mentioned "Kusum Devi Agrawal" and the policy // 9 // was effective for the period from 02.03.2013 to 01.03.201. Under the above insurance policy, building including plinth and foundation were insured with the O.P. No.1. The sum assured is Rs.50,00,000/-. It appears that complainant No.1 Kusum Devi Agrawal obtained insurance policy from the O.P. No.1 for her building, plinth and foundation.
12. In the insurance policy, it is not mentioned that Kusum Devi Agrawal (complainant No.1) has obtained above insurance policy from the O.P. No.1 for K. Kusum Auto India Pvt. Ltd. (complainant No.2).
13. The complainants pleaded that the complainant No.1 is owner of the property situated at Dhimrapur Chowk, Raigarh. The complainants have not filed lease deed, Memorandum & Articles of Association, Certificate of Incorporation of the complainant No.2. The complainants have filed copy of registered notice sent to the O.P. No.1, O.P. No.2 and Surveyor in which it is mentioned that K. Kusum Auto India Pvt. Ltd is a Company and the complainant No.1 is its director and Vinjay Agrawa and Sagar Agrawal are also director of the said company. It appears that the complainant No.1 is not sole proprietor or Director of the said company. Looking to the registered notice, it appears that the complainant No.1 is not sole director of the said company. Vinay Agrawal and Sagar Agrawal are also directors of the said company, but the instant complaint has been filed by Kusum Devi Agrawal. The complainants have not filed any documents to prove // 10 // that any resolution was passed by the directors to authorise Kusum Devi Agrawal to file complaint on behalf of the complainant No.2, therefore, it cannot be held that Vinay Agrawal and Sagar Agrawal have authorised Kusum Devi Agrawal to file the complaint on behalf of the complainant No.2 in capacity of director of the said company.
14. According to the complainant No.1 has leased out the property to complainant No.2. The complainants did not file copy of lease deed.
15. Section 105 of The Transfer of Property Act, 1882 runs thus :-
"105. Lease defined : A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.
Lessor, lessee, premium and rent defined : The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share service or other thing to be rendered is called the rent."
16. In Section 108 of The Transfer of Property Act, 1882, there is provision for rights and liabilities of lessor and lessee. Clause (o) of Section 108, runs thus :-
"(o) the lessess may use the property and its products (if any) as a person of ordinary prudence would use them if they were his own; but he must not use, or permit another to use, the property for a purpose other than that for which it was leased, or fell [or sell] timber, pull down or damage buildings, // 11 // [belonging to the lessor, or] work mines or quarries not open when the lease was granted, or commit any other act which is destructive or permanently injuries thereto."
17. Looking to the said definitions, when the property was leased out by the complainant No.1 to K. Kusum Auto India Pvt. Ltd. (complainant No.2), the complainant No.1 transferred her individual right to lessee company . The insurance policy was obtained by the Kusum Devi Agrawal in her personal capacity. The complainant No.1 transferred her right to lessee i.e. complainant No.2. Kusum Devi Agrawal (complainant No.1) or K. Kusum Auto India Pvt. Ltd. (complainant No.2) have not submitted any application to the O.P. No.1 (Insurance Company) for changing the name of the insured in the insurance policy.
18. In Advanced Law Lexicon by P. Ramanatha Aiyar 3rd Edition 2005 at page 2380, the word Insurable Interest, is defined as :
"Insurable interest" in respect of goods, "does not necessarily imply a right to the whole, or a part, of a thing nor, necessarily and exclusively, that which may be the subject of privation ; but he having some relation to or concern in, the subject of the insurance, with relation or concern, by the happening of perils insured against, may be so affected as to produce a damage, detriment, or prejudice, to the person insuring and where a man is so circumstances with respect to matters exposed to certain risks or damages he may be said to be interested in the safety of // 12 // the thing. To be interested in the preservation of a thing is to be so circumstanced with respect to it as to have benefit from its existence, - prejudice from its destruction."
The right to insure goods, the buyer has an insurable interest when the goods have been identified, and the seller for as long as it has title or a security interest.
An 'insurable interest' in the property in such an interest as shall make the loss of the property of pecuniary damage to the insured. It is a right, benefit or advantage arising out of the property or dependent thereon, or any liability in respect thereof, or any relation to or concern therein, of such a nature that it might be so affected by the contemplated peril as to directly demnify the insured.
Insurable interest is a special requirement of a contract of insurance. A valid contract of insurance can be entered into by a person only if he has insurable interest in the subject matter of insurance, that is, if he is interested in the marine adventure".
19. The complainants have not proved that K. Kusum Auto India Pvt. Ltd. is insured with the O.P. No.1. The complainants have filed copy of letter of repudiation dated 30th July, 2015 (document No.2) sent by the O.P. No.1 to M/s Kusum Devi Agrawal. In the said letter it is mentioned thus :-
"We wish to inform that in absence of any additional supporting documents, the appointed Surveyor has finalized their report on the basis of available papers. Our observations from the Final Survey Report are as under :-
// 13 //
1) It is learnt that M/s Kusum Devi Agrawal purchased a piece of land besides Gharghora Road. Surveyors have received copy of lease agreement dated 2006 wherein it is learnt that subject land was given on lease of 10 years to M/s K. Kusum Auto India Pvt.
Ltd. (a Suzuki dealership). The said agreement specifies that lessee can construct building on land and set up any industry on that land.
2) From the perusal of books of accounts, it is learnt that the building has been capitalized in the books of lessee i.e. M/s K. Kusum Auto India Pvt. Ltd.
3) The above referred agreement also stipulates that lessee (herein in K. Kusum Auto) is entitled to obtain property insurance on the premises and shall be entitled to raise claim in event of a loss.
4) In the instant case, the insurance policy cover is obtained by Lessor (Kusum Devi Agrawal) and not lessee (K. Kusum Auto). The insurance policy is based on principle of insurable interest. Based on the available information, the surveyor has not been able to prove that the insurance interest of affected property rest with you. In absence of confirmation of insurable interest, we regret we are unable to consider your claim favourably."
20. Even in the said letter, the O.P. No.1 also requested M/s Kusum Devi Agrawal that "we regret that we are unable to consider this claim. However, should you believe that we have overlooked any material fact or circumstance, or should you wish to present an alternative interpretation of any relevant policy provision, please draw the same to our attention for our consideration."
// 14 //
21. The complainants have not filed any document to prove that after receiving letter of repudiation from the O.P. No.1, they had given clarification, as asked for by the O.P. No.1.
22. The complainants pleaded that the O.P. No.1 appointed B.K. Agrawal & Associates as Surveyors for assessment of loss suffered by the complainants. The complainants pleaded that in the month of July, 2013 there was incident of flood and inundation in which the premises of the complainants was completely damaged and they suffered loss to the tune of Rs.54,46,018/-, but the complainants have not filed any document to prove that they suffered loss to above extent. According to the complainants, the O.P. No.1 appointed B.K. Agrawal & Associates as Surveyor, who assessed loss.
23. In para 6 of the legal notice dated 24.07.2015 sent by Mr. Sudhanshu Guru, Advocate on behalf of the complainants to O.P. No.1, O.P. No.2 and the Surveyors, it is mentioned that "... details regarding total loss of Rs.50,46,018/- was submitted which was pending for a long period because the Surveyor has illegally demand the amount which was not paid by the complainant. The complainants have several time made complaints, then on 21.05.2015 the claim of the complainant was allowed for Rs.4,46,263/-, on the basis of which the complainants have made complaint against the OPs, but the OPs did not gave response, therefore, legal notice is required to be sent."
// 15 //
24. From bare perusal of the complaint and legal notice sent by the Advocate on behalf of the complainant, it appears that Surveyors inspected the affected premises and assessed the loss. If the Surveyor had assessed the loss and the Surveyor Report was not provided by the O.P. No.1 to the complainants, the complainants could have filed an application under Right To Information Act, 2005 before the O.P. No.1 for obtaining copy of Survey Report, but the complainants did not do so and did not file copy of Survey Report.
25. The complainants have filed copies of daily newspaper Dainik Bhaskar and Kello Pravah in which news was published regarding rain and flood. The complainants also filed some photographs, but looking to the photographs it is not possible to assess loss. On the basis of photographs, it cannot be held that the complainants suffered the loss, which is mentioned in the complaint.
26. In Escorts JCB Ltd. Vs. Commissioner of Central Excise, Delhi
- II [also reported in (2003) 1 SCC 281], it has been observed by Hon'ble Supreme Court thus :-
"10....... It is not necessary that insurance of the goods and the ownership of the property insured must always go together. It may be depending upon various facts and circumstances of a particular transaction and terms and conditions of sale. A reference has also been made to Colinvauz's Law of Insurance, 6th Edn. By Robert Merking to indicate that there may be insurance to cover the interest of // 16 // others, that is to say, not necessarily the person insuring the interest must be the owner of the property.
27. The facts of the above cited case are distinguishable from the facts of the instant case and will not helpful to the complainants.
28. In the instant case, the insurance policy was issued in the favour of complainant No.1 and the complainant No.1 leased out the premises to complainant No.2. The complainants did not submit any application before the O.P. No.1 for transferring the insurance policy in favour of the complainant No.2, therefore, at the time of incident, the complainant No.1 had no insurable interest over the premises in question. The complainant no.2, who is lessee of the property in question was not insured with the O.P. No.1, therefore, the O.P. No.1 has rightly repudiated the claim of the complainants and did not commit any deficiency in service. The complainant no.1 was not duly authorised by the directors of the complainant No.2, to file the instant complaint on behalf of K. Kusum Auto India Pvt. Ltd. The complainants are not entitled for getting any compensation from the O.P. No.1.
29. Therefore, the complaint of the complainants against the OPs, is liable to be and is hereby dismissed. No order as to the cost of this complaint.
(Justice R.S. Sharma) (D.K. Poddar) (Narendra Gupta)
President Member Member
01/03/2017 01/03/2017 01/03/2017